Correlation Between Westrock Coffee and John B
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and John B 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 John B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and John B Sanfilippo, you can compare the effects of market volatilities on Westrock Coffee and John B 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 John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and John B.
Diversification Opportunities for Westrock Coffee and John B
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Westrock and John is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo 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 John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and John B go up and down completely randomly.
Pair Corralation between Westrock Coffee and John B
Given the investment horizon of 90 days Westrock Coffee is expected to generate 1.28 times more return on investment than John B. However, Westrock Coffee is 1.28 times more volatile than John B Sanfilippo. It trades about 0.14 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.15 per unit of risk. If you would invest 699.00 in Westrock Coffee on August 24, 2024 and sell it today you would earn a total of 68.00 from holding Westrock Coffee or generate 9.73% 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. John B Sanfilippo
Performance |
| Timeline |
| Westrock Coffee |
| John B Sanfilippo |
Westrock Coffee and John B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and John B
The main advantage of trading using opposite Westrock Coffee and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, John B 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 John B will offset losses from the drop in John B'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 |
| John B vs. Bellring Brands LLC | John B vs. Treehouse Foods | John B vs. Ingredion Incorporated | John B vs. JM Smucker |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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