Correlation Between Westrock Coffee and ConAgra Foods
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and ConAgra Foods 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 ConAgra Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and ConAgra Foods, you can compare the effects of market volatilities on Westrock Coffee and ConAgra Foods 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 ConAgra Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and ConAgra Foods.
Diversification Opportunities for Westrock Coffee and ConAgra Foods
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westrock and ConAgra is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and ConAgra Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConAgra Foods 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 ConAgra Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConAgra Foods has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and ConAgra Foods go up and down completely randomly.
Pair Corralation between Westrock Coffee and ConAgra Foods
Given the investment horizon of 90 days Westrock Coffee is expected to generate 3.18 times more return on investment than ConAgra Foods. However, Westrock Coffee is 3.18 times more volatile than ConAgra Foods. It trades about 0.22 of its potential returns per unit of risk. ConAgra Foods is currently generating about -0.28 per unit of risk. If you would invest 698.00 in Westrock Coffee on August 28, 2024 and sell it today you would earn a total of 115.00 from holding Westrock Coffee or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. ConAgra Foods
Performance |
| Timeline |
| Westrock Coffee |
| ConAgra Foods |
Westrock Coffee and ConAgra Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and ConAgra Foods
The main advantage of trading using opposite Westrock Coffee and ConAgra Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, ConAgra Foods 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 ConAgra Foods will offset losses from the drop in ConAgra Foods' long position.| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
| ConAgra Foods vs. Bellring Brands LLC | ConAgra Foods vs. Ingredion Incorporated | ConAgra Foods vs. Nomad Foods | ConAgra Foods vs. Simply Good 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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