Correlation Between Westrock Coffee and Chemours
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Chemours 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 Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Chemours Co, you can compare the effects of market volatilities on Westrock Coffee and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Chemours.
Diversification Opportunities for Westrock Coffee and Chemours
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westrock and Chemours is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Chemours go up and down completely randomly.
Pair Corralation between Westrock Coffee and Chemours
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, Westrock Coffee is 1.29 times less risky than Chemours. The stock trades about -0.04 of its potential returns per unit of risk. The Chemours Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,605 in Chemours Co on September 12, 2024 and sell it today you would lose (1,488) from holding Chemours Co or give up 41.28% 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. Chemours Co
Performance |
| Timeline |
| Westrock Coffee |
| Chemours |
Westrock Coffee and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Chemours
The main advantage of trading using opposite Westrock Coffee and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
| Chemours vs. Griffon | Chemours vs. Merck Company | Chemours vs. Brinker International | Chemours vs. Alcoa Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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