Correlation Between United Natural and TreeHouse Foods
Can any of the company-specific risk be diversified away by investing in both United Natural and TreeHouse 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 United Natural and TreeHouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and TreeHouse Foods, you can compare the effects of market volatilities on United Natural and TreeHouse 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 United Natural with a short position of TreeHouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and TreeHouse Foods.
Diversification Opportunities for United Natural and TreeHouse Foods
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and TreeHouse is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and TreeHouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TreeHouse Foods and United Natural 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 United Natural Foods are associated (or correlated) with TreeHouse Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TreeHouse Foods has no effect on the direction of United Natural i.e., United Natural and TreeHouse Foods go up and down completely randomly.
Pair Corralation between United Natural and TreeHouse Foods
Assuming the 90 days horizon United Natural Foods is expected to generate 1.25 times more return on investment than TreeHouse Foods. However, United Natural is 1.25 times more volatile than TreeHouse Foods. It trades about 0.17 of its potential returns per unit of risk. TreeHouse Foods is currently generating about -0.06 per unit of risk. If you would invest 2,584 in United Natural Foods on November 3, 2024 and sell it today you would earn a total of 241.00 from holding United Natural Foods or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. TreeHouse Foods
Performance |
| Timeline |
| United Natural Foods |
| TreeHouse Foods |
United Natural and TreeHouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and TreeHouse Foods
The main advantage of trading using opposite United Natural and TreeHouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, TreeHouse 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 TreeHouse Foods will offset losses from the drop in TreeHouse Foods' long position.| United Natural vs. Penn National Gaming | United Natural vs. Boyd Gaming | United Natural vs. OURGAME INTHOLDL 00005 | United Natural vs. MOUNT GIBSON IRON |
| TreeHouse Foods vs. BII Railway Transportation | TreeHouse Foods vs. HAVERTY FURNITURE A | TreeHouse Foods vs. TITANIUM TRANSPORTGROUP | TreeHouse Foods vs. Algonquin Power Utilities |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |