Correlation Between WestRock and Packaging Corp

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

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

Diversification Opportunities for WestRock and Packaging Corp

0.0

Correlation Coefficient

WestRock  Packaging Corp

Pay attention - limited upside

The 3 months correlation between WestRock and Packaging is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp 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 Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of WestRock i.e., WestRock and Packaging Corp go up and down completely randomly.

Pair Corralation between WestRock and Packaging Corp

If you would invest (100.00) in WestRock Co on December 30, 2024 and sell it today you would earn a total of  100.00  from holding WestRock Co or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

WestRock Co  vs.  Packaging Corp of

WestRock

Risk-Adjusted Performance

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.

Packaging Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Packaging Corp of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with WestRock and Packaging Corp

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

The idea behind WestRock Co and Packaging Corp of 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.