Correlation Between Westrock Coffee and EastGroup Properties

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

By analyzing existing cross correlation between Westrock Coffee and EastGroup Properties, you can compare the effects of market volatilities on Westrock Coffee and EastGroup Properties 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 EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and EastGroup Properties.

Diversification Opportunities for Westrock Coffee and EastGroup Properties

0.02

Correlation Coefficient

Westrock Coffee  EastGroup Properties

Significant diversification

The 3 months correlation between Westrock and EastGroup is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties 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 EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and EastGroup Properties go up and down completely randomly.

Pair Corralation between Westrock Coffee and EastGroup Properties

Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the EastGroup Properties. In addition to that, Westrock Coffee is 2.7 times more volatile than EastGroup Properties. It trades about -0.21 of its total potential returns per unit of risk. EastGroup Properties is currently generating about -0.3 per unit of volatility. If you would invest  17,246  in EastGroup Properties on October 10, 2024 and sell it today you would lose (1,330) from holding EastGroup Properties or give up 7.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Westrock Coffee  vs.  EastGroup Properties

Westrock Coffee

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Westrock Coffee are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Westrock Coffee unveiled solid returns over the last few months and may actually be approaching a breakup point.

EastGroup Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EastGroup Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Westrock Coffee and EastGroup Properties

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

The idea behind Westrock Coffee and EastGroup Properties 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.