Correlation Between DAX Index and Whirlpool
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By analyzing existing cross correlation between DAX Index and Whirlpool, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Whirlpool.
Diversification Opportunities for DAX Index and Whirlpool
Poor diversification
The 3 months correlation between DAX and Whirlpool is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Whirlpool go up and down completely randomly.
Pair Corralation between DAX Index and Whirlpool
Assuming the 90 days trading horizon DAX Index is expected to generate 0.36 times more return on investment than Whirlpool. However, DAX Index is 2.8 times less risky than Whirlpool. It trades about 0.1 of its potential returns per unit of risk. Whirlpool is currently generating about 0.01 per unit of risk. If you would invest 1,399,510 in DAX Index on September 16, 2024 and sell it today you would earn a total of 641,082 from holding DAX Index or generate 45.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Whirlpool
Performance |
| Timeline |
DAX Index and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Whirlpool
Pair trading matchups for Whirlpool
Pair Trading with DAX Index and Whirlpool
The main advantage of trading using opposite DAX Index and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. PLAYTIKA HOLDING DL 01 | DAX Index vs. Eagle Materials | DAX Index vs. Materialise NV | DAX Index vs. JD SPORTS FASH |
| Whirlpool vs. Goosehead Insurance | Whirlpool vs. DXC Technology Co | Whirlpool vs. The Hanover Insurance | Whirlpool vs. HANOVER INSURANCE |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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