Correlation Between Post Holdings and Spectrum Brands
Can any of the company-specific risk be diversified away by investing in both Post Holdings and Spectrum Brands 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 Spectrum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post Holdings and Spectrum Brands Holdings, you can compare the effects of market volatilities on Post Holdings and Spectrum Brands 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 Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post Holdings and Spectrum Brands.
Diversification Opportunities for Post Holdings and Spectrum Brands
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Post and Spectrum is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Post Holdings and Spectrum Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Brands Holdings 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 Spectrum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Brands Holdings has no effect on the direction of Post Holdings i.e., Post Holdings and Spectrum Brands go up and down completely randomly.
Pair Corralation between Post Holdings and Spectrum Brands
Given the investment horizon of 90 days Post Holdings is expected to generate 0.5 times more return on investment than Spectrum Brands. However, Post Holdings is 2.01 times less risky than Spectrum Brands. It trades about -0.12 of its potential returns per unit of risk. Spectrum Brands Holdings is currently generating about -0.06 per unit of risk. If you would invest 11,552 in Post Holdings on April 23, 2025 and sell it today you would lose (939.00) from holding Post Holdings or give up 8.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Post Holdings vs. Spectrum Brands Holdings
Performance |
Timeline |
Post Holdings |
Spectrum Brands Holdings |
Post Holdings and Spectrum Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Post Holdings and Spectrum Brands
The main advantage of trading using opposite Post Holdings and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post Holdings position performs unexpectedly, Spectrum Brands 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 Spectrum Brands will offset losses from the drop in Spectrum Brands' 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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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