Correlation Between WestRock and Packaging Corp
Can any of the company-specific risk be diversified away by investing in both WestRock and Packaging Corp 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 Packaging Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WestRock Co and Packaging Corp of, you can compare the effects of market volatilities on WestRock and Packaging Corp 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 Packaging Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of WestRock and Packaging Corp.
Diversification Opportunities for WestRock and Packaging Corp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WestRock and Packaging is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp 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 Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of WestRock i.e., WestRock and Packaging Corp go up and down completely randomly.
Pair Corralation between WestRock and Packaging Corp
Considering the 90-day investment horizon WestRock Co is expected to under-perform the Packaging Corp. In addition to that, WestRock is 1.6 times more volatile than Packaging Corp of. It trades about -0.06 of its total potential returns per unit of risk. Packaging Corp of is currently generating about 0.23 per unit of volatility. If you would invest 17,689 in Packaging Corp of on August 27, 2024 and sell it today you would earn a total of 7,039 from holding Packaging Corp of or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 21.43% |
| Values | Daily Returns |
WestRock Co vs. Packaging Corp of
Performance |
| Timeline |
| WestRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Packaging Corp |
WestRock and Packaging Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WestRock and Packaging Corp
The main advantage of trading using opposite WestRock and Packaging Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WestRock position performs unexpectedly, Packaging Corp 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 Packaging Corp will offset losses from the drop in Packaging Corp's long position.| WestRock vs. Packaging Corp of | WestRock vs. Sealed Air | WestRock vs. Fortive Corp | WestRock vs. LKQ Corporation |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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