Correlation Between TreeHouse Foods and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and PKSHA TECHNOLOGY 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 TreeHouse Foods and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on TreeHouse Foods and PKSHA TECHNOLOGY 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 TreeHouse Foods with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and PKSHA TECHNOLOGY.
Diversification Opportunities for TreeHouse Foods and PKSHA TECHNOLOGY
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TreeHouse and PKSHA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and TreeHouse 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 TreeHouse Foods are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between TreeHouse Foods and PKSHA TECHNOLOGY
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the PKSHA TECHNOLOGY. In addition to that, TreeHouse Foods is 1.0 times more volatile than PKSHA TECHNOLOGY INC. It trades about -0.02 of its total potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.01 per unit of volatility. If you would invest 2,140 in PKSHA TECHNOLOGY INC on August 28, 2024 and sell it today you would lose (20.00) from holding PKSHA TECHNOLOGY INC or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TreeHouse Foods vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| TreeHouse Foods |
| PKSHA TECHNOLOGY INC |
TreeHouse Foods and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and PKSHA TECHNOLOGY
The main advantage of trading using opposite TreeHouse Foods and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.| TreeHouse Foods vs. Superior Plus Corp | TreeHouse Foods vs. NMI Holdings | TreeHouse Foods vs. Origin Agritech | TreeHouse Foods vs. SIVERS SEMICONDUCTORS AB |
| PKSHA TECHNOLOGY vs. Hyster Yale Materials Handling | PKSHA TECHNOLOGY vs. EAGLE MATERIALS | PKSHA TECHNOLOGY vs. Applied Materials | PKSHA TECHNOLOGY vs. Rayonier Advanced Materials |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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