Correlation Between Westrock Coffee and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Axalta Coating 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 Coffee and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and Axalta Coating Systems, you can compare the effects of market volatilities on Westrock Coffee and Axalta Coating 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 Coffee with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Axalta Coating.
Diversification Opportunities for Westrock Coffee and Axalta Coating
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westrock and Axalta is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems and Westrock Coffee 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 Coffee are associated (or correlated) with Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Axalta Coating go up and down completely randomly.
Pair Corralation between Westrock Coffee and Axalta Coating
Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Axalta Coating. In addition to that, Westrock Coffee is 1.74 times more volatile than Axalta Coating Systems. It trades about -0.06 of its total potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.01 per unit of volatility. If you would invest 3,348 in Axalta Coating Systems on September 25, 2024 and sell it today you would earn a total of 87.00 from holding Axalta Coating Systems or generate 2.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Westrock Coffee vs. Axalta Coating Systems
Performance |
Timeline |
Westrock Coffee |
Axalta Coating Systems |
Westrock Coffee and Axalta Coating Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westrock Coffee and Axalta Coating
The main advantage of trading using opposite Westrock Coffee and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse Foods |
Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |