Correlation Between Howden Joinery and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Howden Joinery and Whirlpool 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 Howden Joinery and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Howden Joinery Group and Whirlpool, you can compare the effects of market volatilities on Howden Joinery and Whirlpool 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 Howden Joinery with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howden Joinery and Whirlpool.
Diversification Opportunities for Howden Joinery and Whirlpool
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Howden and Whirlpool is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Howden Joinery Group and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Howden Joinery 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 Howden Joinery Group are associated (or correlated) with Whirlpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whirlpool has no effect on the direction of Howden Joinery i.e., Howden Joinery and Whirlpool go up and down completely randomly.
Pair Corralation between Howden Joinery and Whirlpool
Assuming the 90 days horizon Howden Joinery Group is expected to generate 0.46 times more return on investment than Whirlpool. However, Howden Joinery Group is 2.2 times less risky than Whirlpool. It trades about 0.04 of its potential returns per unit of risk. Whirlpool is currently generating about -0.03 per unit of risk. If you would invest 955.00 in Howden Joinery Group on November 2, 2024 and sell it today you would earn a total of 12.00 from holding Howden Joinery Group or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Howden Joinery Group vs. Whirlpool
Performance |
| Timeline |
| Howden Joinery Group |
| Whirlpool |
Howden Joinery and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Howden Joinery and Whirlpool
The main advantage of trading using opposite Howden Joinery and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howden Joinery position performs unexpectedly, Whirlpool 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 Whirlpool will offset losses from the drop in Whirlpool's long position.| Howden Joinery vs. ASURE SOFTWARE | Howden Joinery vs. ATOSS SOFTWARE | Howden Joinery vs. Magic Software Enterprises | Howden Joinery vs. Kingdee International Software |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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