Correlation Between Westrock Coffee and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Barings BDC 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 Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Barings BDC, you can compare the effects of market volatilities on Westrock Coffee and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Barings BDC.
Diversification Opportunities for Westrock Coffee and Barings BDC
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Westrock and Barings is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Barings BDC go up and down completely randomly.
Pair Corralation between Westrock Coffee and Barings BDC
Given the investment horizon of 90 days Westrock Coffee is expected to generate 2.95 times more return on investment than Barings BDC. However, Westrock Coffee is 2.95 times more volatile than Barings BDC. It trades about 0.18 of its potential returns per unit of risk. Barings BDC is currently generating about 0.12 per unit of risk. If you would invest 698.00 in Westrock Coffee on August 27, 2024 and sell it today you would earn a total of 91.00 from holding Westrock Coffee or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. Barings BDC
Performance |
| Timeline |
| Westrock Coffee |
| Barings BDC |
Westrock Coffee and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Barings BDC
The main advantage of trading using opposite Westrock Coffee and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC'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 |
| Barings BDC vs. PowerUp Acquisition Corp | Barings BDC vs. Aurora Innovation | Barings BDC vs. HUMANA INC | Barings BDC vs. Aquagold International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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