Correlation Between TreeHouse Foods and Dow Jones
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and Dow Jones Industrial, you can compare the effects of market volatilities on TreeHouse Foods and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and Dow Jones.
Diversification Opportunities for TreeHouse Foods and Dow Jones
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TreeHouse and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and Dow Jones go up and down completely randomly.
Pair Corralation between TreeHouse Foods and Dow Jones
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the Dow Jones. In addition to that, TreeHouse Foods is 4.08 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of volatility. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TreeHouse Foods vs. Dow Jones Industrial
Performance |
| Timeline |
TreeHouse Foods and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
TreeHouse Foods
Pair trading matchups for TreeHouse Foods
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TreeHouse Foods and Dow Jones
The main advantage of trading using opposite TreeHouse Foods and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| TreeHouse Foods vs. Superior Plus Corp | TreeHouse Foods vs. NMI Holdings | TreeHouse Foods vs. Origin Agritech | TreeHouse Foods vs. SIVERS SEMICONDUCTORS AB |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |