Correlation Between TreeHouse Foods and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and J+J SNACK 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 J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and JJ SNACK FOODS, you can compare the effects of market volatilities on TreeHouse Foods and J+J SNACK 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 J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and J+J SNACK.
Diversification Opportunities for TreeHouse Foods and J+J SNACK
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TreeHouse and J+J is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and J+J SNACK go up and down completely randomly.
Pair Corralation between TreeHouse Foods and J+J SNACK
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the J+J SNACK. In addition to that, TreeHouse Foods is 3.16 times more volatile than JJ SNACK FOODS. It trades about -0.02 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.2 per unit of volatility. If you would invest 15,400 in JJ SNACK FOODS on August 31, 2024 and sell it today you would earn a total of 900.00 from holding JJ SNACK FOODS or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TreeHouse Foods vs. JJ SNACK FOODS
Performance |
| Timeline |
| TreeHouse Foods |
| JJ SNACK FOODS |
TreeHouse Foods and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and J+J SNACK
The main advantage of trading using opposite TreeHouse Foods and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| TreeHouse Foods vs. Danone SA | TreeHouse Foods vs. Superior Plus Corp | TreeHouse Foods vs. NMI Holdings | TreeHouse Foods vs. Origin Agritech |
| J+J SNACK vs. Danone SA | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech |
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 Stocks Directory module to find actively traded stocks across global markets.
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