Correlation Between Park National and Westrock Coffee

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Park National 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 Park National and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park National and Westrock Coffee, you can compare the effects of market volatilities on Park National 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 Park National with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and Westrock Coffee.

Diversification Opportunities for Park National and Westrock Coffee

ParkWestrockDiversified AwayParkWestrockDiversified Away100%
0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Park and Westrock is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Park National and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and Park National 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 Park National 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 Park National i.e., Park National and Westrock Coffee go up and down completely randomly.

Pair Corralation between Park National and Westrock Coffee

Considering the 90-day investment horizon Park National is expected to generate 0.61 times more return on investment than Westrock Coffee. However, Park National is 1.64 times less risky than Westrock Coffee. It trades about -0.06 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.15 per unit of risk. If you would invest  16,667  in Park National on November 25, 2024 and sell it today you would lose (343.00) from holding Park National or give up 2.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Park National  vs.  Westrock Coffee

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505101520
JavaScript chart by amCharts 3.21.15PRK WEST
       Timeline  
Park National 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Park National has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb160170180190200
Westrock Coffee 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Westrock Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.577.58

Park National and Westrock Coffee Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.69-2.03-1.37-0.7-0.050.531.121.712.3 0.020.040.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.15PRK WEST
       Returns  

Pair Trading with Park National and Westrock Coffee

The main advantage of trading using opposite Park National and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park National 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.
The idea behind Park National and Westrock Coffee 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges