Correlation Between MEDICAL FACILITIES and Whirlpool
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES 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 MEDICAL FACILITIES and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Whirlpool, you can compare the effects of market volatilities on MEDICAL FACILITIES 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 MEDICAL FACILITIES with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Whirlpool.
Diversification Opportunities for MEDICAL FACILITIES and Whirlpool
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MEDICAL and Whirlpool is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Whirlpool go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Whirlpool
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to under-perform the Whirlpool. But the stock apears to be less risky and, when comparing its historical volatility, MEDICAL FACILITIES NEW is 1.58 times less risky than Whirlpool. The stock trades about -0.04 of its potential returns per unit of risk. The Whirlpool is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 11,080 in Whirlpool on October 20, 2024 and sell it today you would earn a total of 1,385 from holding Whirlpool or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Whirlpool
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Whirlpool |
MEDICAL FACILITIES and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Whirlpool
The main advantage of trading using opposite MEDICAL FACILITIES and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES 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.| MEDICAL FACILITIES vs. AIR PRODCHEMICALS | MEDICAL FACILITIES vs. KIMBALL ELECTRONICS | MEDICAL FACILITIES vs. STMICROELECTRONICS | MEDICAL FACILITIES vs. Globex Mining Enterprises |
| Whirlpool vs. Stag Industrial | Whirlpool vs. FIREWEED METALS P | Whirlpool vs. UNIQA INSURANCE GR | Whirlpool vs. Ultra Clean Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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