Correlation Between Cal Maine and Post Holdings

Can any of the company-specific risk be diversified away by investing in both Cal Maine 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 Cal Maine and Post Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cal Maine Foods and Post Holdings, you can compare the effects of market volatilities on Cal Maine 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 Cal Maine with a short position of Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Post Holdings.

Diversification Opportunities for Cal Maine and Post Holdings

-0.5

Correlation Coefficient

Cal Maine  Post Holdings

Very good diversification

The 3 months correlation between Cal and Post is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Cal Maine 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 Cal Maine Foods 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 Cal Maine i.e., Cal Maine and Post Holdings go up and down completely randomly.

Pair Corralation between Cal Maine and Post Holdings

Given the investment horizon of 90 days Cal Maine Foods is expected to generate 2.19 times more return on investment than Post Holdings. However, Cal Maine is 2.19 times more volatile than Post Holdings. It trades about 0.1 of its potential returns per unit of risk. Post Holdings is currently generating about -0.01 per unit of risk. If you would invest  9,505  in Cal Maine Foods on May 18, 2025 and sell it today you would earn a total of  1,560  from holding Cal Maine Foods or generate 16.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cal Maine Foods  vs.  Post Holdings

Cal Maine Foods

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile essential indicators, Cal Maine displayed solid returns over the last few months and may actually be approaching a breakup point.

Post Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Post Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Post Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cal Maine and Post Holdings

The main advantage of trading using opposite Cal Maine and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine 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.

The idea behind Cal Maine Foods and Post Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.