Correlation Between Westrock Coffee and Mako Mining

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

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

Diversification Opportunities for Westrock Coffee and Mako Mining

-0.09

Correlation Coefficient

Westrock Coffee  Mako Mining

Good diversification

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

Pair Corralation between Westrock Coffee and Mako Mining

Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Mako Mining. In addition to that, Westrock Coffee is 1.23 times more volatile than Mako Mining Corp. It trades about -0.01 of its total potential returns per unit of risk. Mako Mining Corp is currently generating about 0.02 per unit of volatility. If you would invest  225.00  in Mako Mining Corp on October 25, 2024 and sell it today you would earn a total of  4.00  from holding Mako Mining Corp or generate 1.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Westrock Coffee  vs.  Mako Mining Corp

Westrock Coffee

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Westrock Coffee is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mako Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Mako Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Westrock Coffee and Mako Mining

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

The idea behind Westrock Coffee and Mako Mining Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.