Correlation Between Westrock Coffee and Norfolk Southern
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Norfolk Southern 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 Norfolk Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Norfolk Southern, you can compare the effects of market volatilities on Westrock Coffee and Norfolk Southern 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 Norfolk Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Norfolk Southern.
Diversification Opportunities for Westrock Coffee and Norfolk Southern
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westrock and Norfolk is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Norfolk Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norfolk Southern 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 Norfolk Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norfolk Southern has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Norfolk Southern go up and down completely randomly.
Pair Corralation between Westrock Coffee and Norfolk Southern
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Norfolk Southern. In addition to that, Westrock Coffee is 3.65 times more volatile than Norfolk Southern. It trades about 0.0 of its total potential returns per unit of risk. Norfolk Southern is currently generating about 0.33 per unit of volatility. If you would invest 23,060 in Norfolk Southern on October 20, 2024 and sell it today you would earn a total of 1,474 from holding Norfolk Southern or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. Norfolk Southern
Performance |
| Timeline |
| Westrock Coffee |
| Norfolk Southern |
Westrock Coffee and Norfolk Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Norfolk Southern
The main advantage of trading using opposite Westrock Coffee and Norfolk Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Norfolk Southern 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 Norfolk Southern will offset losses from the drop in Norfolk Southern'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 |
| Norfolk Southern vs. Union Pacific | Norfolk Southern vs. Canadian Pacific Railway | Norfolk Southern vs. Canadian National Railway | Norfolk Southern vs. Westinghouse Air Brake |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |