Correlation Between Westrock Coffee and Ault Alliance
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Ault Alliance 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 Ault Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Ault Alliance, you can compare the effects of market volatilities on Westrock Coffee and Ault Alliance 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 Ault Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Ault Alliance.
Diversification Opportunities for Westrock Coffee and Ault Alliance
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westrock and Ault is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance 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 Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Ault Alliance go up and down completely randomly.
Pair Corralation between Westrock Coffee and Ault Alliance
Given the investment horizon of 90 days Westrock Coffee is expected to generate 0.3 times more return on investment than Ault Alliance. However, Westrock Coffee is 3.38 times less risky than Ault Alliance. It trades about -0.02 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.2 per unit of risk. If you would invest 1,131 in Westrock Coffee on September 2, 2024 and sell it today you would lose (328.00) from holding Westrock Coffee or give up 29.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.68% |
| Values | Daily Returns |
Westrock Coffee vs. Ault Alliance
Performance |
| Timeline |
| Westrock Coffee |
| Ault Alliance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Westrock Coffee and Ault Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Ault Alliance
The main advantage of trading using opposite Westrock Coffee and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.| Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods | Westrock Coffee vs. Kellanova |
| Ault Alliance vs. Stratasys | Ault Alliance vs. SNDL Inc | Ault Alliance vs. Casio Computer Co | Ault Alliance vs. Pinterest |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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