Correlation Between Albertsons Companies and WESTROCK

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

By analyzing existing cross correlation between Albertsons Companies and WESTROCK 4 percent, you can compare the effects of market volatilities on Albertsons Companies 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 Albertsons Companies with a short position of WESTROCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and WESTROCK.

Diversification Opportunities for Albertsons Companies and WESTROCK

-0.37

Correlation Coefficient

Albertsons Companies  WESTROCK

Very good diversification

The 3 months correlation between Albertsons and WESTROCK is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and WESTROCK 4 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTROCK 4 percent and Albertsons Companies 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 Albertsons Companies 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 4 percent has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and WESTROCK go up and down completely randomly.

Pair Corralation between Albertsons Companies and WESTROCK

Considering the 90-day investment horizon Albertsons Companies is expected to generate 2.76 times more return on investment than WESTROCK. However, Albertsons Companies is 2.76 times more volatile than WESTROCK 4 percent. It trades about 0.05 of its potential returns per unit of risk. WESTROCK 4 percent is currently generating about -0.1 per unit of risk. If you would invest  1,874  in Albertsons Companies on September 16, 2024 and sell it today you would earn a total of  76.00  from holding Albertsons Companies or generate 4.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.77%
Values	Daily Returns

Albertsons Companies  vs.  WESTROCK 4 percent

Albertsons Companies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Albertsons Companies is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

WESTROCK 4 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESTROCK 4 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, WESTROCK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Albertsons Companies and WESTROCK

The main advantage of trading using opposite Albertsons Companies and WESTROCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies 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.

The idea behind Albertsons Companies and WESTROCK 4 percent 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.