Correlation Between One Group and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both One Group 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 One Group and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Group Hospitality and Westrock Coffee, you can compare the effects of market volatilities on One Group 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 One Group with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Group and Westrock Coffee.
Diversification Opportunities for One Group and Westrock Coffee
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between One and Westrock is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and One Group 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 One Group Hospitality 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 One Group i.e., One Group and Westrock Coffee go up and down completely randomly.
Pair Corralation between One Group and Westrock Coffee
Given the investment horizon of 90 days One Group Hospitality is expected to generate 0.9 times more return on investment than Westrock Coffee. However, One Group Hospitality is 1.11 times less risky than Westrock Coffee. It trades about 0.09 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.06 per unit of risk. If you would invest 341.00 in One Group Hospitality on November 3, 2024 and sell it today you would earn a total of 34.00 from holding One Group Hospitality or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Group Hospitality vs. Westrock Coffee
Performance |
| Timeline |
| One Group Hospitality |
| Westrock Coffee |
One Group and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Group and Westrock Coffee
The main advantage of trading using opposite One Group and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Group 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.| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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