Correlation Between Seneca Foods and Treehouse Foods
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Treehouse Foods at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Seneca Foods and Treehouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seneca Foods Corp and Treehouse Foods, you can compare the effects of market volatilities on Seneca Foods and Treehouse Foods and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Seneca Foods with a short position of Treehouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Treehouse Foods.
Diversification Opportunities for Seneca Foods and Treehouse Foods
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seneca and Treehouse is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Treehouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treehouse Foods and Seneca Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Seneca Foods Corp are associated (or correlated) with Treehouse Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treehouse Foods has no effect on the direction of Seneca Foods i.e., Seneca Foods and Treehouse Foods go up and down completely randomly.
Pair Corralation between Seneca Foods and Treehouse Foods
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 0.63 times more return on investment than Treehouse Foods. However, Seneca Foods Corp is 1.59 times less risky than Treehouse Foods. It trades about 0.27 of its potential returns per unit of risk. Treehouse Foods is currently generating about -0.07 per unit of risk. If you would invest 6,320 in Seneca Foods Corp on August 28, 2024 and sell it today you would earn a total of 868.00 from holding Seneca Foods Corp or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seneca Foods Corp vs. Treehouse Foods
Performance |
| Timeline |
| Seneca Foods Corp |
| Treehouse Foods |
Seneca Foods and Treehouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Treehouse Foods
The main advantage of trading using opposite Seneca Foods and Treehouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Treehouse Foods can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Treehouse Foods will offset losses from the drop in Treehouse Foods' long position.| Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Natures Sunshine Products | Seneca Foods vs. Associated British Foods |
| Treehouse Foods vs. Lancaster Colony | Treehouse Foods vs. John B Sanfilippo | Treehouse Foods vs. Seneca Foods Corp | Treehouse Foods vs. Seneca Foods Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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