Correlation Between Westrock Coffee and Atmos Energy
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Atmos Energy 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 Westrock Coffee and Atmos Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Atmos Energy, you can compare the effects of market volatilities on Westrock Coffee and Atmos Energy 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 Westrock Coffee with a short position of Atmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Atmos Energy.
Diversification Opportunities for Westrock Coffee and Atmos Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westrock and Atmos is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Atmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmos Energy and Westrock Coffee 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 Westrock Coffee are associated (or correlated) with Atmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmos Energy has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Atmos Energy go up and down completely randomly.
Pair Corralation between Westrock Coffee and Atmos Energy
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Atmos Energy. In addition to that, Westrock Coffee is 3.39 times more volatile than Atmos Energy. It trades about -0.06 of its total potential returns per unit of risk. Atmos Energy is currently generating about 0.26 per unit of volatility. If you would invest 11,364 in Atmos Energy on September 3, 2024 and sell it today you would earn a total of 3,492 from holding Atmos Energy or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. Atmos Energy
Performance |
| Timeline |
| Westrock Coffee |
| Atmos Energy |
Westrock Coffee and Atmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Atmos Energy
The main advantage of trading using opposite Westrock Coffee and Atmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Atmos Energy 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 Atmos Energy will offset losses from the drop in Atmos Energy's long position.| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
| Atmos Energy vs. NewJersey Resources | Atmos Energy vs. One Gas | Atmos Energy vs. Northwest Natural Gas | Atmos Energy vs. Chesapeake Utilities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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