Correlation Between DSS and WestRock
Can any of the company-specific risk be diversified away by investing in both DSS and WestRock 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 DSS and WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSS Inc and WestRock Co, you can compare the effects of market volatilities on DSS and WestRock 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 DSS with a short position of WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSS and WestRock.
Diversification Opportunities for DSS and WestRock
Very good diversification
The 3 months correlation between DSS and WestRock is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding DSS Inc and WestRock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WestRock and DSS 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 DSS Inc are associated (or correlated) with WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WestRock has no effect on the direction of DSS i.e., DSS and WestRock go up and down completely randomly.
Pair Corralation between DSS and WestRock
Considering the 90-day investment horizon DSS Inc is expected to under-perform the WestRock. In addition to that, DSS is 2.34 times more volatile than WestRock Co. It trades about -0.09 of its total potential returns per unit of risk. WestRock Co is currently generating about 0.15 per unit of volatility. If you would invest 3,468 in WestRock Co on August 25, 2024 and sell it today you would earn a total of 1,683 from holding WestRock Co or generate 48.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.7% |
| Values | Daily Returns |
DSS Inc vs. WestRock Co
Performance |
| Timeline |
| DSS Inc |
| WestRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DSS and WestRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSS and WestRock
The main advantage of trading using opposite DSS and WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSS position performs unexpectedly, WestRock 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 will offset losses from the drop in WestRock's long position.The idea behind DSS Inc and WestRock Co 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.| WestRock vs. Packaging Corp of | WestRock vs. Sealed Air | WestRock vs. Fortive Corp | WestRock vs. LKQ Corporation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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