Correlation Between Farmmi and Post Holdings
Can any of the company-specific risk be diversified away by investing in both Farmmi and Post Holdings 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 Farmmi and Post Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmmi Inc and Post Holdings, you can compare the effects of market volatilities on Farmmi and Post Holdings 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 Farmmi with a short position of Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmmi and Post Holdings.
Diversification Opportunities for Farmmi and Post Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmmi and Post is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Farmmi Inc and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Farmmi 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 Farmmi Inc are associated (or correlated) with Post Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post Holdings has no effect on the direction of Farmmi i.e., Farmmi and Post Holdings go up and down completely randomly.
Pair Corralation between Farmmi and Post Holdings
Given the investment horizon of 90 days Farmmi Inc is expected to under-perform the Post Holdings. In addition to that, Farmmi is 5.16 times more volatile than Post Holdings. It trades about -0.06 of its total potential returns per unit of risk. Post Holdings is currently generating about 0.04 per unit of volatility. If you would invest 9,475 in Post Holdings on August 26, 2024 and sell it today you would earn a total of 2,105 from holding Post Holdings or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmmi Inc vs. Post Holdings
Performance |
| Timeline |
| Farmmi Inc |
| Post Holdings |
Farmmi and Post Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmmi and Post Holdings
The main advantage of trading using opposite Farmmi and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmmi position performs unexpectedly, Post Holdings 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 Post Holdings will offset losses from the drop in Post Holdings' long position.| Farmmi vs. Bellring Brands LLC | Farmmi vs. Ingredion Incorporated | Farmmi vs. Nomad Foods | Farmmi vs. Post Holdings |
| Post Holdings vs. Simply Good Foods | Post Holdings vs. Treehouse Foods | Post Holdings vs. J J Snack | Post Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |