Correlation Between Hain Celestial and Post Holdings

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

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

Diversification Opportunities for Hain Celestial and Post Holdings

0.33

Correlation Coefficient

Hain Celestial  Post Holdings

Weak diversification

The 3 months correlation between Hain and Post is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings and Hain Celestial 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 The Hain Celestial 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 Hain Celestial i.e., Hain Celestial and Post Holdings go up and down completely randomly.

Pair Corralation between Hain Celestial and Post Holdings

Given the investment horizon of 90 days The Hain Celestial is expected to under-perform the Post Holdings. In addition to that, Hain Celestial is 3.78 times more volatile than Post Holdings. It trades about -0.06 of its total potential returns per unit of risk. Post Holdings is currently generating about 0.34 per unit of volatility. If you would invest  10,971  in Post Holdings on September 2, 2024 and sell it today you would earn a total of  1,077  from holding Post Holdings or generate 9.82% return on investment over 90 days.

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

The Hain Celestial  vs.  Post Holdings

Hain Celestial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hain Celestial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Hain Celestial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Post Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Post Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 Hain Celestial and Post Holdings

The main advantage of trading using opposite Hain Celestial and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial 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 The Hain Celestial 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 Global Correlations module to find global opportunities by holding instruments from different markets.