Correlation Between Gold Road and WHIRLPOOL
Can any of the company-specific risk be diversified away by investing in both Gold Road 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 Gold Road and WHIRLPOOL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and WHIRLPOOL, you can compare the effects of market volatilities on Gold Road 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 Gold Road with a short position of WHIRLPOOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and WHIRLPOOL.
Diversification Opportunities for Gold Road and WHIRLPOOL
Very weak diversification
The 3 months correlation between Gold and WHIRLPOOL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and WHIRLPOOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHIRLPOOL and Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and WHIRLPOOL go up and down completely randomly.
Pair Corralation between Gold Road and WHIRLPOOL
Assuming the 90 days horizon Gold Road is expected to generate 1.02 times less return on investment than WHIRLPOOL. But when comparing it to its historical volatility, Gold Road Resources is 1.09 times less risky than WHIRLPOOL. It trades about 0.24 of its potential returns per unit of risk. WHIRLPOOL is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,376 in WHIRLPOOL on September 12, 2024 and sell it today you would earn a total of 3,559 from holding WHIRLPOOL or generate 42.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Gold Road Resources vs. WHIRLPOOL
Performance |
| Timeline |
| Gold Road Resources |
| WHIRLPOOL |
Gold Road and WHIRLPOOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and WHIRLPOOL
The main advantage of trading using opposite Gold Road and WHIRLPOOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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.| Gold Road vs. Franco Nevada | Gold Road vs. Superior Plus Corp | Gold Road vs. SIVERS SEMICONDUCTORS AB | Gold Road vs. Norsk Hydro ASA |
| WHIRLPOOL vs. Eidesvik Offshore ASA | WHIRLPOOL vs. Thai Beverage Public | WHIRLPOOL vs. SOLSTAD OFFSHORE NK | WHIRLPOOL vs. CAL MAINE FOODS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |