Correlation Between Nestle SA and Post Holdings
Can any of the company-specific risk be diversified away by investing in both Nestle SA 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 Nestle SA and Post Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nestle SA and Post Holdings, you can compare the effects of market volatilities on Nestle SA 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 Nestle SA with a short position of Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nestle SA and Post Holdings.
Diversification Opportunities for Nestle SA and Post Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nestle and Post is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nestle SA and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Nestle SA 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 Nestle SA 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 Nestle SA i.e., Nestle SA and Post Holdings go up and down completely randomly.
Pair Corralation between Nestle SA and Post Holdings
Assuming the 90 days horizon Nestle SA is expected to under-perform the Post Holdings. In addition to that, Nestle SA is 1.01 times more volatile than Post Holdings. It trades about -0.01 of its total potential returns per unit of risk. Post Holdings is currently generating about 0.06 per unit of volatility. If you would invest 7,565 in Post Holdings on January 24, 2024 and sell it today you would earn a total of 2,955 from holding Post Holdings or generate 39.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nestle SA vs. Post Holdings
Performance |
| Timeline |
| Nestle SA |
| Post Holdings |
Nestle SA and Post Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nestle SA and Post Holdings
The main advantage of trading using opposite Nestle SA and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestle SA 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.| Nestle SA vs. Kellanova | Nestle SA vs. Lancaster Colony | Nestle SA vs. The A2 Milk | Nestle SA vs. Artisan Consumer Goods |
| Post Holdings vs. Bunge Limited | Post Holdings vs. Archer Daniels Midland | Post Holdings vs. Fresh Del Monte | Post Holdings vs. Limoneira Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |