Correlation Between Fortive Corp and WestRock

Can any of the company-specific risk be diversified away by investing in both Fortive Corp and WestRock 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 Fortive Corp and WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortive Corp and WestRock Co, you can compare the effects of market volatilities on Fortive Corp and WestRock 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 Fortive Corp with a short position of WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and WestRock.

Diversification Opportunities for Fortive Corp and WestRock

0.36

Correlation Coefficient

Fortive Corp  WestRock

Weak diversification

The 3 months correlation between Fortive and WestRock is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and WestRock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WestRock and Fortive Corp 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 Fortive Corp are associated (or correlated) with WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WestRock has no effect on the direction of Fortive Corp i.e., Fortive Corp and WestRock go up and down completely randomly.

Pair Corralation between Fortive Corp and WestRock

If you would invest  7,432  in Fortive Corp on August 30, 2024 and sell it today you would earn a total of  508.00  from holding Fortive Corp or generate 6.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Fortive Corp  vs.  WestRock Co

Fortive Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fortive Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Fortive Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

WestRock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WestRock Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, WestRock is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fortive Corp and WestRock

The main advantage of trading using opposite Fortive Corp and WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp position performs unexpectedly, WestRock 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 WestRock will offset losses from the drop in WestRock's long position.

The idea behind Fortive Corp and WestRock Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..