Correlation Between TreeHouse Foods and Computer
Can any of the company-specific risk be diversified away by investing in both TreeHouse Foods and Computer 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 Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TreeHouse Foods and Computer And Technologies, you can compare the effects of market volatilities on TreeHouse Foods and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of TreeHouse Foods and Computer.
Diversification Opportunities for TreeHouse Foods and Computer
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TreeHouse and Computer is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding TreeHouse Foods and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of TreeHouse Foods i.e., TreeHouse Foods and Computer go up and down completely randomly.
Pair Corralation between TreeHouse Foods and Computer
Assuming the 90 days horizon TreeHouse Foods is expected to under-perform the Computer. In addition to that, TreeHouse Foods is 1.56 times more volatile than Computer And Technologies. It trades about -0.02 of its total potential returns per unit of risk. Computer And Technologies is currently generating about 0.05 per unit of volatility. If you would invest 16.00 in Computer And Technologies on July 25, 2025 and sell it today you would earn a total of 1.00 from holding Computer And Technologies or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TreeHouse Foods vs. Computer And Technologies
Performance |
| Timeline |
| TreeHouse Foods |
| Computer And Technologies |
TreeHouse Foods and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TreeHouse Foods and Computer
The main advantage of trading using opposite TreeHouse Foods and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TreeHouse Foods position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| TreeHouse Foods vs. Nestl SA | TreeHouse Foods vs. Kraft Heinz Co | TreeHouse Foods vs. General Mills | TreeHouse Foods vs. General Mills |
| Computer vs. Accenture plc | Computer vs. International Business Machines | Computer vs. Infosys Limited | Computer vs. Capgemini SE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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