Correlation Between WestRock and International Paper
Can any of the company-specific risk be diversified away by investing in both WestRock and International Paper 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 and International Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WestRock Co and International Paper, you can compare the effects of market volatilities on WestRock and International Paper 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 with a short position of International Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of WestRock and International Paper.
Diversification Opportunities for WestRock and International Paper
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WestRock and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and International Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Paper and WestRock 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 Co are associated (or correlated) with International Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Paper has no effect on the direction of WestRock i.e., WestRock and International Paper go up and down completely randomly.
Pair Corralation between WestRock and International Paper
If you would invest 4,865 in International Paper on August 24, 2024 and sell it today you would earn a total of 1,053 from holding International Paper or generate 21.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
WestRock Co vs. International Paper
Performance |
| Timeline |
| WestRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Paper |
WestRock and International Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WestRock and International Paper
The main advantage of trading using opposite WestRock and International Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WestRock position performs unexpectedly, International Paper 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 International Paper will offset losses from the drop in International Paper's long position.| WestRock vs. Packaging Corp of | WestRock vs. Sealed Air | WestRock vs. Fortive Corp | WestRock vs. LKQ Corporation |
| International Paper vs. Sealed Air | International Paper vs. Avery Dennison Corp | International Paper vs. Sonoco Products | International Paper vs. Ball Corporation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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