Correlation Between Westrock Coffee and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Westrock Coffee and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westrock Coffee and The Coca Cola, you can compare the effects of market volatilities on Westrock Coffee and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Coca Cola.
Diversification Opportunities for Westrock Coffee and Coca Cola
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westrock and Coca is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Coca Cola go up and down completely randomly.
Pair Corralation between Westrock Coffee and Coca Cola
Given the investment horizon of 90 days Westrock Coffee is expected to generate 3.03 times more return on investment than Coca Cola. However, Westrock Coffee is 3.03 times more volatile than The Coca Cola. It trades about 0.01 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.0 per unit of risk. If you would invest 996.00 in Westrock Coffee on January 25, 2024 and sell it today you would earn a total of 2.00 from holding Westrock Coffee or generate 0.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Westrock Coffee vs. The Coca Cola
Performance |
Timeline |
Westrock Coffee |
Coca Cola |
Westrock Coffee and Coca Cola Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westrock Coffee and Coca Cola
The main advantage of trading using opposite Westrock Coffee and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westrock Coffee position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.Westrock Coffee vs. Bunge Limited | Westrock Coffee vs. Archer Daniels Midland | Westrock Coffee vs. Fresh Del Monte | Westrock Coffee vs. Limoneira Co |
Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |