Correlation Between Westrock Coffee and Corsair Gaming

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

By analyzing existing cross correlation between Westrock Coffee and Corsair Gaming, you can compare the effects of market volatilities on Westrock Coffee and Corsair Gaming 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 Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westrock Coffee and Corsair Gaming.

Diversification Opportunities for Westrock Coffee and Corsair Gaming

0.48

Correlation Coefficient

Westrock Coffee  Corsair Gaming

Very weak diversification

The 3 months correlation between Westrock and Corsair is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Corsair Gaming go up and down completely randomly.

Pair Corralation between Westrock Coffee and Corsair Gaming

Given the investment horizon of 90 days Westrock Coffee is expected to under-perform the Corsair Gaming. In addition to that, Westrock Coffee is 1.11 times more volatile than Corsair Gaming. It trades about -0.03 of its total potential returns per unit of risk. Corsair Gaming is currently generating about 0.0 per unit of volatility. If you would invest  651.00  in Corsair Gaming on September 23, 2024 and sell it today you would lose (24.00) from holding Corsair Gaming or give up 3.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Westrock Coffee  vs.  Corsair Gaming

Westrock Coffee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westrock Coffee 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Corsair Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corsair Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Corsair Gaming is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Westrock Coffee and Corsair Gaming

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

The idea behind Westrock Coffee and Corsair Gaming 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.