Correlation Between Post Holdings and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Post Holdings 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 Post Holdings and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post Holdings and Seneca Foods Corp, you can compare the effects of market volatilities on Post Holdings 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 Post Holdings with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post Holdings and Seneca Foods.
Diversification Opportunities for Post Holdings and Seneca Foods
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Post and Seneca is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Post Holdings 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 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 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 Post Holdings i.e., Post Holdings and Seneca Foods go up and down completely randomly.
Pair Corralation between Post Holdings and Seneca Foods
Given the investment horizon of 90 days Post Holdings is expected to generate 25.89 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, Post Holdings is 2.82 times less risky than Seneca Foods. It trades about 0.04 of its potential returns per unit of risk. 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 |
Post Holdings vs. Seneca Foods Corp
Performance |
| Timeline |
| Post Holdings |
| Seneca Foods Corp |
Post Holdings and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post Holdings and Seneca Foods
The main advantage of trading using opposite Post Holdings and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post Holdings 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.| Post Holdings vs. Bellring Brands LLC | Post Holdings vs. Ingredion Incorporated | Post Holdings vs. Nomad Foods | Post Holdings vs. Simply Good Foods |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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