Correlation Between Sealed Air and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Westrock Coffee, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Westrock Coffee.
Diversification Opportunities for Sealed Air and Westrock Coffee
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sealed and Westrock is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and Westrock Coffee go up and down completely randomly.
Pair Corralation between Sealed Air and Westrock Coffee
Considering the 90-day investment horizon Sealed Air is expected to generate 4.84 times less return on investment than Westrock Coffee. But when comparing it to its historical volatility, Sealed Air is 2.24 times less risky than Westrock Coffee. It trades about 0.04 of its potential returns per unit of risk. Westrock Coffee is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 636.00 in Westrock Coffee on September 13, 2024 and sell it today you would earn a total of 73.00 from holding Westrock Coffee or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Westrock Coffee
Performance |
| Timeline |
| Sealed Air |
| Westrock Coffee |
Sealed Air and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Westrock Coffee
The main advantage of trading using opposite Sealed Air and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| Westrock Coffee vs. General Mills | Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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