Correlation Between TreeHouse Foods and Wayside Technology
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and Wayside 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 Wayside 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 Wayside Technology Group, you can compare the effects of market volatilities on TreeHouse Foods and Wayside 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and Wayside Technology.
Diversification Opportunities for TreeHouse Foods and Wayside Technology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TreeHouse and Wayside is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and Wayside Technology go up and down completely randomly.
Pair Corralation between TreeHouse Foods and Wayside Technology
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the Wayside Technology. But the stock apears to be less risky and, when comparing its historical volatility, TreeHouse Foods is 1.09 times less risky than Wayside Technology. The stock trades about -0.06 of its potential returns per unit of risk. The Wayside Technology Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12,200 in Wayside Technology Group on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Wayside Technology Group or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TreeHouse Foods vs. Wayside Technology Group
Performance |
| Timeline |
| TreeHouse Foods |
| Wayside Technology |
TreeHouse Foods and Wayside Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and Wayside Technology
The main advantage of trading using opposite TreeHouse Foods and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, Wayside 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 Wayside Technology will offset losses from the drop in Wayside Technology'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 |
| Wayside Technology vs. Arrow Electronics | Wayside Technology vs. DICKER DATA LTD | Wayside Technology vs. PC Connection | Wayside Technology vs. Esprinet SpA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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