Correlation Between Treehouse Foods and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Treehouse Foods and Seneca Foods 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 Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treehouse Foods and Seneca Foods Corp, you can compare the effects of market volatilities on Treehouse Foods and Seneca Foods 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 Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treehouse Foods and Seneca Foods.
Diversification Opportunities for Treehouse Foods and Seneca Foods
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Treehouse and Seneca is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Treehouse Foods and Seneca Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Corp 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 Seneca Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seneca Foods Corp has no effect on the direction of Treehouse Foods i.e., Treehouse Foods and Seneca Foods go up and down completely randomly.
Pair Corralation between Treehouse Foods and Seneca Foods
Considering the 90-day investment horizon Treehouse Foods is expected to under-perform the Seneca Foods. But the stock apears to be less risky and, when comparing its historical volatility, Treehouse Foods is 1.08 times less risky than Seneca Foods. The stock trades about -0.14 of its potential returns per unit of risk. The Seneca Foods Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 6,144 in Seneca Foods Corp on August 28, 2024 and sell it today you would earn a total of 1,226 from holding Seneca Foods Corp or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
Treehouse Foods vs. Seneca Foods Corp
Performance |
| Timeline |
| Treehouse Foods |
| Seneca Foods Corp |
Treehouse Foods and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treehouse Foods and Seneca Foods
The main advantage of trading using opposite Treehouse Foods and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treehouse Foods position performs unexpectedly, Seneca Foods 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 Seneca Foods will offset losses from the drop in Seneca Foods' 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 |
| Seneca Foods vs. Bridgford Foods | Seneca Foods vs. J J Snack | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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