Correlation Between Vestis and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Vestis 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 Vestis and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestis and Westrock Coffee, you can compare the effects of market volatilities on Vestis 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 Vestis with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestis and Westrock Coffee.
Diversification Opportunities for Vestis and Westrock Coffee
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vestis and Westrock is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Vestis and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and Vestis 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 Vestis 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 Vestis i.e., Vestis and Westrock Coffee go up and down completely randomly.
Pair Corralation between Vestis and Westrock Coffee
Given the investment horizon of 90 days Vestis is expected to generate 1.07 times less return on investment than Westrock Coffee. In addition to that, Vestis is 1.16 times more volatile than Westrock Coffee. It trades about 0.22 of its total potential returns per unit of risk. Westrock Coffee is currently generating about 0.27 per unit of volatility. If you would invest 664.00 in Westrock Coffee on September 1, 2024 and sell it today you would earn a total of 139.00 from holding Westrock Coffee or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestis vs. Westrock Coffee
Performance |
| Timeline |
| Vestis |
| Westrock Coffee |
Vestis and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestis and Westrock Coffee
The main advantage of trading using opposite Vestis and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestis 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.| Vestis vs. Oatly Group AB | Vestis vs. Nascent Wine | Vestis vs. Willamette Valley Vineyards | Vestis vs. LithiumBank Resources Corp |
| Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods | Westrock Coffee vs. Kellanova |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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