Correlation Between Bassett Furniture and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture 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 Bassett Furniture and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bassett Furniture Industries and Westrock Coffee, you can compare the effects of market volatilities on Bassett Furniture 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 Bassett Furniture with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Westrock Coffee.
Diversification Opportunities for Bassett Furniture and Westrock Coffee
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bassett and Westrock is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and Bassett Furniture 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 Bassett Furniture Industries 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 Bassett Furniture i.e., Bassett Furniture and Westrock Coffee go up and down completely randomly.
Pair Corralation between Bassett Furniture and Westrock Coffee
Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 0.77 times more return on investment than Westrock Coffee. However, Bassett Furniture Industries is 1.31 times less risky than Westrock Coffee. It trades about 0.01 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.03 per unit of risk. If you would invest 1,601 in Bassett Furniture Industries on September 3, 2024 and sell it today you would lose (64.00) from holding Bassett Furniture Industries or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Westrock Coffee
Performance |
| Timeline |
| Bassett Furniture |
| Westrock Coffee |
Bassett Furniture and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Westrock Coffee
The main advantage of trading using opposite Bassett Furniture and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture 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.| Bassett Furniture vs. Hooker Furniture | Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Haverty Furniture Companies | Bassett Furniture vs. La Z Boy Incorporated |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |