Correlation Between 44965UAA2 and Westrock Coffee

Can any of the company-specific risk be diversified away by investing in both 44965UAA2 and Westrock Coffee 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 44965UAA2 and Westrock Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AER 653829 21 DEC 65 and Westrock Coffee, you can compare the effects of market volatilities on 44965UAA2 and Westrock Coffee 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 44965UAA2 with a short position of Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of 44965UAA2 and Westrock Coffee.

Diversification Opportunities for 44965UAA2 and Westrock Coffee

0.09

Correlation Coefficient

44965UAA2  Westrock Coffee

Significant diversification

The 3 months correlation between 44965UAA2 and Westrock is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AER 653829 21 DEC 65 and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee and 44965UAA2 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 AER 653829 21 DEC 65 are associated (or correlated) with Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of 44965UAA2 i.e., 44965UAA2 and Westrock Coffee go up and down completely randomly.

Pair Corralation between 44965UAA2 and Westrock Coffee

Assuming the 90 days trading horizon AER 653829 21 DEC 65 is expected to generate 0.18 times more return on investment than Westrock Coffee. However, AER 653829 21 DEC 65 is 5.62 times less risky than Westrock Coffee. It trades about 0.16 of its potential returns per unit of risk. Westrock Coffee is currently generating about -0.1 per unit of risk. If you would invest  8,326  in AER 653829 21 DEC 65 on December 4, 2024 and sell it today you would earn a total of  216.00  from holding AER 653829 21 DEC 65 or generate 2.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	47.46%
Values	Daily Returns

AER 653829 21 DEC 65  vs.  Westrock Coffee

AER 653829 21

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AER 653829 21 DEC 65 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 44965UAA2 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Westrock Coffee

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westrock Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 44965UAA2 and Westrock Coffee

The main advantage of trading using opposite 44965UAA2 and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 44965UAA2 position performs unexpectedly, Westrock Coffee 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 Coffee will offset losses from the drop in Westrock Coffee's long position.

The idea behind AER 653829 21 DEC 65 and Westrock Coffee 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.