Correlation Between TreeHouse Foods and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and BW OFFSHORE 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 BW OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and BW OFFSHORE LTD, you can compare the effects of market volatilities on TreeHouse Foods and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and BW OFFSHORE.
Diversification Opportunities for TreeHouse Foods and BW OFFSHORE
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between TreeHouse and XY81 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and BW OFFSHORE go up and down completely randomly.
Pair Corralation between TreeHouse Foods and BW OFFSHORE
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the BW OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, TreeHouse Foods is 1.04 times less risky than BW OFFSHORE. The stock trades about -0.02 of its potential returns per unit of risk. The BW OFFSHORE LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 166.00 in BW OFFSHORE LTD on August 25, 2024 and sell it today you would earn a total of 72.00 from holding BW OFFSHORE LTD or generate 43.37% 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. BW OFFSHORE LTD
Performance |
| Timeline |
| TreeHouse Foods |
| BW OFFSHORE LTD |
TreeHouse Foods and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and BW OFFSHORE
The main advantage of trading using opposite TreeHouse Foods and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| TreeHouse Foods vs. AVITA Medical | TreeHouse Foods vs. HEALTHCARE REAL A | TreeHouse Foods vs. Bausch Health Companies | TreeHouse Foods vs. CVS Health |
| BW OFFSHORE vs. Brockhaus Capital Management | BW OFFSHORE vs. HANOVER INSURANCE | BW OFFSHORE vs. AGF Management Limited | BW OFFSHORE vs. Reinsurance Group of |
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
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |