Correlation Between Crown Crafts and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Crown Crafts 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 Crown Crafts and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Crafts and Whirlpool, you can compare the effects of market volatilities on Crown Crafts 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 Crown Crafts with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Crafts and Whirlpool.
Diversification Opportunities for Crown Crafts and Whirlpool
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crown and Whirlpool is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Crown Crafts and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Crown Crafts 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 Crown Crafts 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 Crown Crafts i.e., Crown Crafts and Whirlpool go up and down completely randomly.
Pair Corralation between Crown Crafts and Whirlpool
Given the investment horizon of 90 days Crown Crafts is expected to under-perform the Whirlpool. But the stock apears to be less risky and, when comparing its historical volatility, Crown Crafts is 1.22 times less risky than Whirlpool. The stock trades about -0.11 of its potential returns per unit of risk. The Whirlpool is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 10,212 in Whirlpool on August 28, 2024 and sell it today you would earn a total of 1,588 from holding Whirlpool or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Crafts vs. Whirlpool
Performance |
| Timeline |
| Crown Crafts |
| Whirlpool |
Crown Crafts and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Crafts and Whirlpool
The main advantage of trading using opposite Crown Crafts and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Crafts 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.| Crown Crafts vs. Bassett Furniture Industries | Crown Crafts vs. Hooker Furniture | Crown Crafts vs. Natuzzi SpA | Crown Crafts vs. Flexsteel Industries |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |