Correlation Between Westrock Coffee and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and PennantPark Floating 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 PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and PennantPark Floating Rate, you can compare the effects of market volatilities on Westrock Coffee and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and PennantPark Floating.
Diversification Opportunities for Westrock Coffee and PennantPark Floating
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westrock and PennantPark is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and PennantPark Floating go up and down completely randomly.
Pair Corralation between Westrock Coffee and PennantPark Floating
Given the investment horizon of 90 days Westrock Coffee is expected to generate 6.13 times more return on investment than PennantPark Floating. However, Westrock Coffee is 6.13 times more volatile than PennantPark Floating Rate. It trades about 0.23 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.2 per unit of risk. If you would invest 689.00 in Westrock Coffee on September 3, 2024 and sell it today you would earn a total of 114.00 from holding Westrock Coffee or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westrock Coffee vs. PennantPark Floating Rate
Performance |
| Timeline |
| Westrock Coffee |
| PennantPark Floating Rate |
Westrock Coffee and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and PennantPark Floating
The main advantage of trading using opposite Westrock Coffee and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating'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 |
| PennantPark Floating vs. Federated Premier Municipal | PennantPark Floating vs. Blackrock Muniyield | PennantPark Floating vs. Federated Investors B | PennantPark Floating vs. SEI Investments |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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