Correlation Between Coffee Holding and Western Midstream
Can any of the company-specific risk be diversified away by investing in both Coffee Holding and Western Midstream 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 Coffee Holding and Western Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Western Midstream Partners, you can compare the effects of market volatilities on Coffee Holding and Western Midstream 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 Coffee Holding with a short position of Western Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Western Midstream.
Diversification Opportunities for Coffee Holding and Western Midstream
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coffee and Western is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Western Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Midstream and Coffee Holding 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 Coffee Holding Co are associated (or correlated) with Western Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Midstream has no effect on the direction of Coffee Holding i.e., Coffee Holding and Western Midstream go up and down completely randomly.
Pair Corralation between Coffee Holding and Western Midstream
Considering the 90-day investment horizon Coffee Holding Co is expected to under-perform the Western Midstream. In addition to that, Coffee Holding is 2.9 times more volatile than Western Midstream Partners. It trades about -0.07 of its total potential returns per unit of risk. Western Midstream Partners is currently generating about 0.1 per unit of volatility. If you would invest 3,718 in Western Midstream Partners on September 9, 2025 and sell it today you would earn a total of 281.00 from holding Western Midstream Partners or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Western Midstream Partners
Performance |
| Timeline |
| Coffee Holding |
| Western Midstream |
Coffee Holding and Western Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Western Midstream
The main advantage of trading using opposite Coffee Holding and Western Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding position performs unexpectedly, Western Midstream 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 Western Midstream will offset losses from the drop in Western Midstream's long position.| Coffee Holding vs. Bit Origin | Coffee Holding vs. Eastside Distilling, | Coffee Holding vs. Natural Alternatives International | Coffee Holding vs. Marwynn Holdings, Common |
| Western Midstream vs. Viper Energy Ut | Western Midstream vs. YPF Sociedad Anonima | Western Midstream vs. Plains All American | Western Midstream vs. DT Midstream |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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