Correlation Between WestRock and NEXE Innovations
Can any of the company-specific risk be diversified away by investing in both WestRock and NEXE Innovations 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 NEXE Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WestRock Co and NEXE Innovations, you can compare the effects of market volatilities on WestRock and NEXE Innovations 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 NEXE Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of WestRock and NEXE Innovations.
Diversification Opportunities for WestRock and NEXE Innovations
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WestRock and NEXE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and NEXE Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXE Innovations 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 NEXE Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXE Innovations has no effect on the direction of WestRock i.e., WestRock and NEXE Innovations go up and down completely randomly.
Pair Corralation between WestRock and NEXE Innovations
Considering the 90-day investment horizon WestRock is expected to generate 1.4 times less return on investment than NEXE Innovations. But when comparing it to its historical volatility, WestRock Co is 3.56 times less risky than NEXE Innovations. It trades about 0.15 of its potential returns per unit of risk. NEXE Innovations is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in NEXE Innovations on August 25, 2024 and sell it today you would earn a total of 11.00 from holding NEXE Innovations or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.7% |
| Values | Daily Returns |
WestRock Co vs. NEXE Innovations
Performance |
| Timeline |
| WestRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NEXE Innovations |
WestRock and NEXE Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WestRock and NEXE Innovations
The main advantage of trading using opposite WestRock and NEXE Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WestRock position performs unexpectedly, NEXE Innovations 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 NEXE Innovations will offset losses from the drop in NEXE Innovations' long position.| WestRock vs. Packaging Corp of | WestRock vs. Sealed Air | WestRock vs. Fortive Corp | WestRock vs. LKQ Corporation |
| NEXE Innovations vs. Imaflex | NEXE Innovations vs. Karat Packaging | NEXE Innovations vs. DSS Inc | NEXE Innovations vs. Myers Industries |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |