Correlation Between Treehouse Foods and Hain Celestial
Can any of the company-specific risk be diversified away by investing in both Treehouse Foods and Hain Celestial 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 Hain Celestial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treehouse Foods and The Hain Celestial, you can compare the effects of market volatilities on Treehouse Foods and Hain Celestial 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 Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treehouse Foods and Hain Celestial.
Diversification Opportunities for Treehouse Foods and Hain Celestial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Treehouse and Hain is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Treehouse Foods and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial 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 Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Treehouse Foods i.e., Treehouse Foods and Hain Celestial go up and down completely randomly.
Pair Corralation between Treehouse Foods and Hain Celestial
Considering the 90-day investment horizon Treehouse Foods is expected to under-perform the Hain Celestial. But the stock apears to be less risky and, when comparing its historical volatility, Treehouse Foods is 1.31 times less risky than Hain Celestial. The stock trades about -0.07 of its potential returns per unit of risk. The The Hain Celestial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 885.00 in The Hain Celestial on August 28, 2024 and sell it today you would lose (27.00) from holding The Hain Celestial or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treehouse Foods vs. The Hain Celestial
Performance |
| Timeline |
| Treehouse Foods |
| Hain Celestial |
Treehouse Foods and Hain Celestial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treehouse Foods and Hain Celestial
The main advantage of trading using opposite Treehouse Foods and Hain Celestial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treehouse Foods position performs unexpectedly, Hain Celestial 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 Hain Celestial will offset losses from the drop in Hain Celestial's long position.| Treehouse Foods vs. Lancaster Colony | Treehouse Foods vs. John B Sanfilippo | Treehouse Foods vs. Seneca Foods Corp | Treehouse Foods vs. Seneca Foods Corp |
| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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