Correlation Between Westrock Coffee and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Cracker Barrel 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 Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Cracker Barrel Old, you can compare the effects of market volatilities on Westrock Coffee and Cracker Barrel 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 Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Cracker Barrel.
Diversification Opportunities for Westrock Coffee and Cracker Barrel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westrock and Cracker is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Cracker Barrel Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cracker Barrel Old 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 Cracker Barrel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cracker Barrel Old has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Cracker Barrel go up and down completely randomly.
Pair Corralation between Westrock Coffee and Cracker Barrel
Given the investment horizon of 90 days Westrock Coffee is expected to generate 0.86 times more return on investment than Cracker Barrel. However, Westrock Coffee is 1.17 times less risky than Cracker Barrel. It trades about -0.01 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.02 per unit of risk. If you would invest 929.00 in Westrock Coffee on September 2, 2024 and sell it today you would lose (126.00) from holding Westrock Coffee or give up 13.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. Cracker Barrel Old
Performance |
| Timeline |
| Westrock Coffee |
| Cracker Barrel Old |
Westrock Coffee and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Cracker Barrel
The main advantage of trading using opposite Westrock Coffee and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Cracker Barrel 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 Cracker Barrel will offset losses from the drop in Cracker Barrel's long position.| Westrock Coffee vs. Campbell Soup | Westrock Coffee vs. ConAgra Foods | Westrock Coffee vs. Hormel Foods | Westrock Coffee vs. Kellanova |
| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel vs. Papa Johns 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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