Correlation Between Amer Sports, and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Amer Sports, 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 Amer Sports, and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Whirlpool, you can compare the effects of market volatilities on Amer Sports, 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 Amer Sports, with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Whirlpool.
Diversification Opportunities for Amer Sports, and Whirlpool
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amer and Whirlpool is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Amer Sports, 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 Amer Sports, 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 Amer Sports, i.e., Amer Sports, and Whirlpool go up and down completely randomly.
Pair Corralation between Amer Sports, and Whirlpool
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 1.62 times less return on investment than Whirlpool. In addition to that, Amer Sports, is 1.26 times more volatile than Whirlpool. It trades about 0.21 of its total potential returns per unit of risk. Whirlpool is currently generating about 0.43 per unit of volatility. If you would invest 11,399 in Whirlpool on October 20, 2024 and sell it today you would earn a total of 1,602 from holding Whirlpool or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amer Sports, vs. Whirlpool
Performance |
| Timeline |
| Amer Sports, |
| Whirlpool |
Amer Sports, and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Whirlpool
The main advantage of trading using opposite Amer Sports, and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, 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.| Amer Sports, vs. Lipocine | Amer Sports, vs. Canlan Ice Sports | Amer Sports, vs. MYT Netherlands Parent | Amer Sports, vs. Verra Mobility Corp |
| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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