Correlation Between Monolithic Power and Post Holdings

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

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

Diversification Opportunities for Monolithic Power and Post Holdings

0.16

Correlation Coefficient

Monolithic Power  Post Holdings

Average diversification

The 3 months correlation between Monolithic and Post is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Monolithic Power 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 Monolithic Power Systems 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 Monolithic Power i.e., Monolithic Power and Post Holdings go up and down completely randomly.

Pair Corralation between Monolithic Power and Post Holdings

Given the investment horizon of 90 days Monolithic Power Systems is expected to generate 1.71 times more return on investment than Post Holdings. However, Monolithic Power is 1.71 times more volatile than Post Holdings. It trades about 0.09 of its potential returns per unit of risk. Post Holdings is currently generating about -0.07 per unit of risk. If you would invest  83,890  in Monolithic Power Systems on September 11, 2025 and sell it today you would earn a total of  12,405  from holding Monolithic Power Systems or generate 14.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Monolithic Power Systems  vs.  Post Holdings

Monolithic Power Systems

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Monolithic Power Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Monolithic Power reported 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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Monolithic Power and Post Holdings

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

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.