Correlation Between Barings BDC and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Westrock Coffee 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 Barings BDC and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Westrock Coffee, you can compare the effects of market volatilities on Barings BDC and Westrock Coffee 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 Barings BDC with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Westrock Coffee.
Diversification Opportunities for Barings BDC and Westrock Coffee
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Westrock is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and Barings BDC 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 Barings BDC are associated (or correlated) with Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Barings BDC i.e., Barings BDC and Westrock Coffee go up and down completely randomly.
Pair Corralation between Barings BDC and Westrock Coffee
Given the investment horizon of 90 days Barings BDC is expected to generate 0.48 times more return on investment than Westrock Coffee. However, Barings BDC is 2.09 times less risky than Westrock Coffee. It trades about 0.07 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.03 per unit of risk. If you would invest 718.00 in Barings BDC on August 27, 2024 and sell it today you would earn a total of 302.00 from holding Barings BDC or generate 42.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Westrock Coffee
Performance |
| Timeline |
| Barings BDC |
| Westrock Coffee |
Barings BDC and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Westrock Coffee
The main advantage of trading using opposite Barings BDC and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee's long position.| Barings BDC vs. PowerUp Acquisition Corp | Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International |
| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |