Correlation Between WestRock and Myers Industries

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

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

Diversification Opportunities for WestRock and Myers Industries

-0.67

Correlation Coefficient

WestRock  Myers Industries

Excellent diversification

The 3 months correlation between WestRock and Myers is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries and WestRock 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 Co are associated (or correlated) with Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of WestRock i.e., WestRock and Myers Industries go up and down completely randomly.

Pair Corralation between WestRock and Myers Industries

Considering the 90-day investment horizon WestRock Co is expected to generate 0.82 times more return on investment than Myers Industries. However, WestRock Co is 1.21 times less risky than Myers Industries. It trades about 0.06 of its potential returns per unit of risk. Myers Industries is currently generating about -0.05 per unit of risk. If you would invest  3,582  in WestRock Co on October 4, 2024 and sell it today you would earn a total of  1,569  from holding WestRock Co or generate 43.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	74.95%
Values	Daily Returns

WestRock Co  vs.  Myers Industries

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.

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with WestRock and Myers Industries

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

The idea behind WestRock Co and Myers Industries 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.