Correlation Between Simply Good and Post Holdings

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

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

Diversification Opportunities for Simply Good and Post Holdings

0.49

Correlation Coefficient

Simply Good  Post Holdings

Very weak diversification

The 3 months correlation between Simply and Post is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Simply Good 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 Simply Good 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 Simply Good i.e., Simply Good and Post Holdings go up and down completely randomly.

Pair Corralation between Simply Good and Post Holdings

Given the investment horizon of 90 days Simply Good Foods is expected to under-perform the Post Holdings. In addition to that, Simply Good is 1.41 times more volatile than Post Holdings. It trades about -0.2 of its total potential returns per unit of risk. Post Holdings is currently generating about -0.1 per unit of volatility. If you would invest  11,360  in Post Holdings on May 4, 2025 and sell it today you would lose (806.00) from holding Post Holdings or give up 7.1% of portfolio value over 90 days.

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

Simply Good Foods  vs.  Post Holdings

Simply Good Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simply Good Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Post Holdings

Risk-Adjusted Performance

Very Weak

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 Simply Good and Post Holdings

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

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.