Correlation Between TreeHouse Foods and MTY Food
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and MTY Food 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 MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and MTY Food Group, you can compare the effects of market volatilities on TreeHouse Foods and MTY Food 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 MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and MTY Food.
Diversification Opportunities for TreeHouse Foods and MTY Food
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between TreeHouse and MTY is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group 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 MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and MTY Food go up and down completely randomly.
Pair Corralation between TreeHouse Foods and MTY Food
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the MTY Food. But the stock apears to be less risky and, when comparing its historical volatility, TreeHouse Foods is 1.06 times less risky than MTY Food. The stock trades about -0.06 of its potential returns per unit of risk. The MTY Food Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,090 in MTY Food Group on November 3, 2024 and sell it today you would earn a total of 390.00 from holding MTY Food Group or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TreeHouse Foods vs. MTY Food Group
Performance |
| Timeline |
| TreeHouse Foods |
| MTY Food Group |
TreeHouse Foods and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and MTY Food
The main advantage of trading using opposite TreeHouse Foods and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, MTY Food 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 MTY Food will offset losses from the drop in MTY Food's long position.| TreeHouse Foods vs. BII Railway Transportation | TreeHouse Foods vs. HAVERTY FURNITURE A | TreeHouse Foods vs. TITANIUM TRANSPORTGROUP | TreeHouse Foods vs. Algonquin Power Utilities |
| MTY Food vs. MPH Health Care | MTY Food vs. WESANA HEALTH HOLD | MTY Food vs. Penta Ocean Construction Co | MTY Food vs. Australian Agricultural |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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