Correlation Between WestRock and O I
Can any of the company-specific risk be diversified away by investing in both WestRock and O I 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 O I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WestRock Co and O I Glass, you can compare the effects of market volatilities on WestRock and O I 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 O I. Check out your portfolio center. Please also check ongoing floating volatility patterns of WestRock and O I.
Diversification Opportunities for WestRock and O I
Good diversification
The 3 months correlation between WestRock and O I is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass 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 O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of WestRock i.e., WestRock and O I go up and down completely randomly.
Pair Corralation between WestRock and O I
Considering the 90-day investment horizon WestRock Co is expected to generate 0.71 times more return on investment than O I. However, WestRock Co is 1.4 times less risky than O I. It trades about 0.06 of its potential returns per unit of risk. O I Glass is currently generating about -0.03 per unit of risk. If you would invest 3,566 in WestRock Co on October 20, 2024 and sell it today you would earn a total of 1,585 from holding WestRock Co or generate 44.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.93% |
| Values | Daily Returns |
WestRock Co vs. O I Glass
Performance |
| Timeline |
| WestRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| O I Glass |
WestRock and O I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WestRock and O I
The main advantage of trading using opposite WestRock and O I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WestRock position performs unexpectedly, O I 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 O I will offset losses from the drop in O I's long position.| WestRock vs. Packaging Corp of | WestRock vs. Sealed Air | WestRock vs. Fortive Corp | WestRock vs. LKQ 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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