Correlation Between ArcelorMittal and Whirlpool
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal 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 ArcelorMittal and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and Whirlpool SA, you can compare the effects of market volatilities on ArcelorMittal 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 ArcelorMittal with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Whirlpool.
Diversification Opportunities for ArcelorMittal and Whirlpool
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and Whirlpool is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and Whirlpool SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool SA and ArcelorMittal 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 ArcelorMittal SA 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 SA has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Whirlpool go up and down completely randomly.
Pair Corralation between ArcelorMittal and Whirlpool
Assuming the 90 days trading horizon ArcelorMittal is expected to generate 1.75 times less return on investment than Whirlpool. But when comparing it to its historical volatility, ArcelorMittal SA is 1.89 times less risky than Whirlpool. It trades about 0.02 of its potential returns per unit of risk. Whirlpool SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 407.00 in Whirlpool SA on September 4, 2024 and sell it today you would earn a total of 27.00 from holding Whirlpool SA or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ArcelorMittal SA vs. Whirlpool SA
Performance |
| Timeline |
| ArcelorMittal SA |
| Whirlpool SA |
ArcelorMittal and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Whirlpool
The main advantage of trading using opposite ArcelorMittal and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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.| ArcelorMittal vs. United States Steel | ArcelorMittal vs. Companhia Siderrgica Nacional | ArcelorMittal vs. Metalurgica Gerdau SA | ArcelorMittal vs. Metalurgica Gerdau SA |
| Whirlpool vs. Whirlpool SA | Whirlpool vs. Marcopolo SA | Whirlpool vs. Indstrias Romi SA | Whirlpool vs. Randon SA Implementos |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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