Correlation Between Post Holdings and Central Garden
Can any of the company-specific risk be diversified away by investing in both Post Holdings and Central Garden 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 Post Holdings and Central Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post Holdings and Central Garden Pet, you can compare the effects of market volatilities on Post Holdings and Central Garden 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 Post Holdings with a short position of Central Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post Holdings and Central Garden.
Diversification Opportunities for Post Holdings and Central Garden
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Post and Central is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Post Holdings and Central Garden Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Garden Pet and Post Holdings 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 Post Holdings are associated (or correlated) with Central Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Garden Pet has no effect on the direction of Post Holdings i.e., Post Holdings and Central Garden go up and down completely randomly.
Pair Corralation between Post Holdings and Central Garden
Given the investment horizon of 90 days Post Holdings is expected to generate 0.58 times more return on investment than Central Garden. However, Post Holdings is 1.73 times less risky than Central Garden. It trades about 0.11 of its potential returns per unit of risk. Central Garden Pet is currently generating about 0.02 per unit of risk. If you would invest 9,287 in Post Holdings on August 28, 2024 and sell it today you would earn a total of 2,495 from holding Post Holdings or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post Holdings vs. Central Garden Pet
Performance |
| Timeline |
| Post Holdings |
| Central Garden Pet |
Post Holdings and Central Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post Holdings and Central Garden
The main advantage of trading using opposite Post Holdings and Central Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post Holdings position performs unexpectedly, Central Garden 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 Central Garden will offset losses from the drop in Central Garden's long position.| Post Holdings vs. Simply Good Foods | Post Holdings vs. Treehouse Foods | Post Holdings vs. J J Snack | Post Holdings vs. Central Garden Pet |
| Central Garden vs. Seneca Foods Corp | Central Garden vs. McCormick Company Incorporated | Central Garden vs. Natures Sunshine Products | Central Garden vs. Seneca Foods Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |