Correlation Between Westrock Coffee and Air Transport
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Air Transport 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 Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Air Transport Services, you can compare the effects of market volatilities on Westrock Coffee and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Air Transport.
Diversification Opportunities for Westrock Coffee and Air Transport
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westrock and Air is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Air Transport go up and down completely randomly.
Pair Corralation between Westrock Coffee and Air Transport
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Air Transport. But the stock apears to be less risky and, when comparing its historical volatility, Westrock Coffee is 1.28 times less risky than Air Transport. The stock trades about -0.03 of its potential returns per unit of risk. The Air Transport Services is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,765 in Air Transport Services on September 2, 2024 and sell it today you would lose (569.00) from holding Air Transport Services or give up 20.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. Air Transport Services
Performance |
| Timeline |
| Westrock Coffee |
| Air Transport Services |
Westrock Coffee and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Air Transport
The main advantage of trading using opposite Westrock Coffee and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods | Westrock Coffee vs. Kellanova |
| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |