Correlation Between Westrock Coffee and PacifiCorp
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and PacifiCorp 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 PacifiCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and PacifiCorp, you can compare the effects of market volatilities on Westrock Coffee and PacifiCorp 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 PacifiCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and PacifiCorp.
Diversification Opportunities for Westrock Coffee and PacifiCorp
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westrock and PacifiCorp is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and PacifiCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacifiCorp 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 PacifiCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacifiCorp has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and PacifiCorp go up and down completely randomly.
Pair Corralation between Westrock Coffee and PacifiCorp
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the PacifiCorp. But the stock apears to be less risky and, when comparing its historical volatility, Westrock Coffee is 2.41 times less risky than PacifiCorp. The stock trades about -0.03 of its potential returns per unit of risk. The PacifiCorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,628 in PacifiCorp on September 5, 2024 and sell it today you would lose (151.00) from holding PacifiCorp or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.79% |
| Values | Daily Returns |
Westrock Coffee vs. PacifiCorp
Performance |
| Timeline |
| Westrock Coffee |
| PacifiCorp |
Westrock Coffee and PacifiCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and PacifiCorp
The main advantage of trading using opposite Westrock Coffee and PacifiCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, PacifiCorp 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 PacifiCorp will offset losses from the drop in PacifiCorp'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 |
| PacifiCorp vs. RWE AG PK | PacifiCorp vs. Iberdrola SA | PacifiCorp vs. Canadian Utilities Limited | PacifiCorp vs. Aquagold International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |