Correlation Between Westrock Coffee and ATS
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and ATS 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 ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and ATS Corporation, you can compare the effects of market volatilities on Westrock Coffee and ATS 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 ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and ATS.
Diversification Opportunities for Westrock Coffee and ATS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westrock and ATS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation 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 ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and ATS go up and down completely randomly.
Pair Corralation between Westrock Coffee and ATS
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the ATS. In addition to that, Westrock Coffee is 1.1 times more volatile than ATS Corporation. It trades about -0.27 of its total potential returns per unit of risk. ATS Corporation is currently generating about 0.12 per unit of volatility. If you would invest 2,786 in ATS Corporation on November 28, 2024 and sell it today you would earn a total of 151.00 from holding ATS Corporation or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. ATS Corp.
Performance |
| Timeline |
| Westrock Coffee |
| ATS Corporation |
Westrock Coffee and ATS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and ATS
The main advantage of trading using opposite Westrock Coffee and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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