Correlation Between Burgerfi International and WestRock
Can any of the company-specific risk be diversified away by investing in both Burgerfi International and WestRock 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 Burgerfi International and WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burgerfi International and WestRock Co, you can compare the effects of market volatilities on Burgerfi International and WestRock 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 Burgerfi International with a short position of WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burgerfi International and WestRock.
Diversification Opportunities for Burgerfi International and WestRock
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Burgerfi and WestRock is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Burgerfi International and WestRock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WestRock and Burgerfi International 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 Burgerfi International are associated (or correlated) with WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WestRock has no effect on the direction of Burgerfi International i.e., Burgerfi International and WestRock go up and down completely randomly.
Pair Corralation between Burgerfi International and WestRock
Considering the 90-day investment horizon Burgerfi International is expected to under-perform the WestRock. In addition to that, Burgerfi International is 3.12 times more volatile than WestRock Co. It trades about -0.14 of its total potential returns per unit of risk. WestRock Co is currently generating about 0.23 per unit of volatility. If you would invest 4,477 in WestRock Co on February 28, 2024 and sell it today you would earn a total of 936.00 from holding WestRock Co or generate 20.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Burgerfi International vs. WestRock Co
Performance |
Timeline |
Burgerfi International |
WestRock |
Burgerfi International and WestRock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Burgerfi International and WestRock
The main advantage of trading using opposite Burgerfi International and WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burgerfi International position performs unexpectedly, WestRock 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 WestRock will offset losses from the drop in WestRock's long position.Burgerfi International vs. Merck Company | Burgerfi International vs. Deciphera Pharmaceuticals LLC | Burgerfi International vs. Innovator SP 500 | Burgerfi International vs. Americold Realty Trust |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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