Correlation Between TreeHouse Foods and ScanSource
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and ScanSource 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 ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and ScanSource, you can compare the effects of market volatilities on TreeHouse Foods and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and ScanSource.
Diversification Opportunities for TreeHouse Foods and ScanSource
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TreeHouse and ScanSource is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and ScanSource go up and down completely randomly.
Pair Corralation between TreeHouse Foods and ScanSource
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the ScanSource. In addition to that, TreeHouse Foods is 1.02 times more volatile than ScanSource. It trades about -0.03 of its total potential returns per unit of risk. ScanSource is currently generating about 0.08 per unit of volatility. If you would invest 2,720 in ScanSource on August 28, 2024 and sell it today you would earn a total of 1,960 from holding ScanSource or generate 72.06% 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. ScanSource
Performance |
| Timeline |
| TreeHouse Foods |
| ScanSource |
TreeHouse Foods and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and ScanSource
The main advantage of trading using opposite TreeHouse Foods and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| TreeHouse Foods vs. Superior Plus Corp | TreeHouse Foods vs. NMI Holdings | TreeHouse Foods vs. Origin Agritech | TreeHouse Foods vs. SIVERS SEMICONDUCTORS AB |
| ScanSource vs. MULTI CHEM LTD | ScanSource vs. HUT 8 P | ScanSource vs. AGRICUL BK CHINA H | ScanSource vs. United Natural Foods |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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