Correlation Between TreeHouse Foods and Mühlbauer Holding
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and Mühlbauer Holding 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 Mühlbauer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and Mhlbauer Holding AG, you can compare the effects of market volatilities on TreeHouse Foods and Mühlbauer Holding 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 Mühlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and Mühlbauer Holding.
Diversification Opportunities for TreeHouse Foods and Mühlbauer Holding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TreeHouse and Mühlbauer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mühlbauer Holding 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 Mühlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mühlbauer Holding has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and Mühlbauer Holding go up and down completely randomly.
Pair Corralation between TreeHouse Foods and Mühlbauer Holding
Assuming the 90 days horizon TreeHouse Foods is expected to generate 2.28 times more return on investment than Mühlbauer Holding. However, TreeHouse Foods is 2.28 times more volatile than Mhlbauer Holding AG. It trades about -0.01 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.22 per unit of risk. If you would invest 3,360 in TreeHouse Foods on September 1, 2024 and sell it today you would lose (80.00) from holding TreeHouse Foods or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TreeHouse Foods vs. Mhlbauer Holding AG
Performance |
| Timeline |
| TreeHouse Foods |
| Mühlbauer Holding |
TreeHouse Foods and Mühlbauer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and Mühlbauer Holding
The main advantage of trading using opposite TreeHouse Foods and Mühlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, Mühlbauer Holding 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 Mühlbauer Holding will offset losses from the drop in Mühlbauer Holding's long position.| TreeHouse Foods vs. LEGACY IRON ORE | TreeHouse Foods vs. Reliance Steel Aluminum | TreeHouse Foods vs. Caltagirone SpA | TreeHouse Foods vs. REGAL ASIAN INVESTMENTS |
| Mühlbauer Holding vs. Westinghouse Air Brake | Mühlbauer Holding vs. Algonquin Power Utilities | Mühlbauer Holding vs. BOSTON BEER A | Mühlbauer Holding vs. The Boston Beer |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |