Correlation Between Westrock Coffee and Volt Lithium

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

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

Diversification Opportunities for Westrock Coffee and Volt Lithium

-0.54

Correlation Coefficient

Westrock Coffee  Volt Lithium

Excellent diversification

The 3 months correlation between Westrock and Volt is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Westrock Coffee and Volt Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volt Lithium Corp 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 Volt Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volt Lithium Corp has no effect on the direction of Westrock Coffee i.e., Westrock Coffee and Volt Lithium go up and down completely randomly.

Pair Corralation between Westrock Coffee and Volt Lithium

Given the investment horizon of 90 days Westrock Coffee is expected to generate 0.61 times more return on investment than Volt Lithium. However, Westrock Coffee is 1.64 times less risky than Volt Lithium. It trades about -0.01 of its potential returns per unit of risk. Volt Lithium Corp is currently generating about -0.05 per unit of risk. If you would invest  835.00  in Westrock Coffee on September 5, 2024 and sell it today you would lose (58.00) from holding Westrock Coffee or give up 6.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Westrock Coffee  vs.  Volt Lithium Corp

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 comparatively stable basic indicators, Westrock Coffee is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Volt Lithium Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Volt Lithium Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Westrock Coffee and Volt Lithium

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

The idea behind Westrock Coffee and Volt Lithium Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.