Correlation Between Westrock Coffee and Wing Yip
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Wing Yip 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 Wing Yip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Wing Yip Food, you can compare the effects of market volatilities on Westrock Coffee and Wing Yip 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 Wing Yip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Wing Yip.
Diversification Opportunities for Westrock Coffee and Wing Yip
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westrock and Wing is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food 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 Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Wing Yip go up and down completely randomly.
Pair Corralation between Westrock Coffee and Wing Yip
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Wing Yip. But the stock apears to be less risky and, when comparing its historical volatility, Westrock Coffee is 147.78 times less risky than Wing Yip. The stock trades about -0.03 of its potential returns per unit of risk. The Wing Yip Food is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Wing Yip Food on September 5, 2024 and sell it today you would earn a total of 445.00 from holding Wing Yip Food or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.41% |
| Values | Daily Returns |
Westrock Coffee vs. Wing Yip Food
Performance |
| Timeline |
| Westrock Coffee |
| Wing Yip Food |
Westrock Coffee and Wing Yip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westrock Coffee and Wing Yip
The main advantage of trading using opposite Westrock Coffee and Wing Yip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Wing Yip 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 Wing Yip will offset losses from the drop in Wing Yip'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 |
| Wing Yip vs. Kellanova | Wing Yip vs. Lamb Weston Holdings | Wing Yip vs. Borealis Foods | Wing Yip vs. Westrock Coffee |
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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