Correlation Between Westrock Coffee and Consumer Staples

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Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Consumer Staples 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 Consumer Staples into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Consumer Staples Portfolio, you can compare the effects of market volatilities on Westrock Coffee and Consumer Staples 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 Consumer Staples. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Consumer Staples.

Diversification Opportunities for Westrock Coffee and Consumer Staples

WestrockConsumerDiversified AwayWestrockConsumerDiversified Away100%
0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Westrock and Consumer is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Consumer Staples Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Staples Por 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 Consumer Staples. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Staples Por has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Consumer Staples go up and down completely randomly.

Pair Corralation between Westrock Coffee and Consumer Staples

Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Consumer Staples. In addition to that, Westrock Coffee is 2.38 times more volatile than Consumer Staples Portfolio. It trades about -0.2 of its total potential returns per unit of risk. Consumer Staples Portfolio is currently generating about 0.03 per unit of volatility. If you would invest  8,958  in Consumer Staples Portfolio on November 26, 2024 and sell it today you would earn a total of  46.00  from holding Consumer Staples Portfolio or generate 0.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Westrock Coffee  vs.  Consumer Staples Portfolio

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15WEST FIJCX
       Timeline  
Westrock Coffee 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Westrock Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.577.58
Consumer Staples Por 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Consumer Staples Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb86889092949698

Westrock Coffee and Consumer Staples Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.4-4.05-2.69-1.33-0.02261.292.633.965.36.64 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15WEST FIJCX
       Returns  

Pair Trading with Westrock Coffee and Consumer Staples

The main advantage of trading using opposite Westrock Coffee and Consumer Staples positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Consumer Staples 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 Consumer Staples will offset losses from the drop in Consumer Staples' long position.
The idea behind Westrock Coffee and Consumer Staples Portfolio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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