Correlation Between Albany International and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Albany International 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 Albany International and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albany International Corp and Whirlpool, you can compare the effects of market volatilities on Albany International 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 Albany International with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albany International and Whirlpool.
Diversification Opportunities for Albany International and Whirlpool
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Albany and Whirlpool is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Albany International Corp and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Albany International 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 Albany International Corp 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 Albany International i.e., Albany International and Whirlpool go up and down completely randomly.
Pair Corralation between Albany International and Whirlpool
Assuming the 90 days horizon Albany International is expected to generate 1.98 times less return on investment than Whirlpool. But when comparing it to its historical volatility, Albany International Corp is 1.27 times less risky than Whirlpool. It trades about 0.22 of its potential returns per unit of risk. 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 | 100.0% |
| Values | Daily Returns |
Albany International Corp vs. Whirlpool
Performance |
| Timeline |
| Albany International Corp |
| Whirlpool |
Albany International and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albany International and Whirlpool
The main advantage of trading using opposite Albany International and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albany International 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.| Albany International vs. Shenzhou International Group | Albany International vs. TORAY INDUSTRIES ADR2 | Albany International vs. Toray Industries | Albany International vs. Coats Group plc |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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