Correlation Between DICKS Sporting and Whirlpool
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and Whirlpool, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Whirlpool.
Diversification Opportunities for DICKS Sporting and Whirlpool
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DICKS and Whirlpool is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and Whirlpool go up and down completely randomly.
Pair Corralation between DICKS Sporting and Whirlpool
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.51 times less return on investment than Whirlpool. In addition to that, DICKS Sporting is 1.29 times more volatile than Whirlpool. It trades about 0.17 of its total potential returns per unit of risk. Whirlpool is currently generating about 0.34 per unit of volatility. 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 |
DICKS Sporting Goods vs. Whirlpool
Performance |
| Timeline |
| DICKS Sporting Goods |
| Whirlpool |
DICKS Sporting and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and Whirlpool
The main advantage of trading using opposite DICKS Sporting and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. SCANDMEDICAL SOLDK 040 | DICKS Sporting vs. CHINA TONTINE WINES | DICKS Sporting vs. Genertec Universal Medical | DICKS Sporting vs. Corporate Office Properties |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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