Correlation Between Haier Smart and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Haier Smart 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 Haier Smart and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and Whirlpool, you can compare the effects of market volatilities on Haier Smart 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 Haier Smart with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Whirlpool.
Diversification Opportunities for Haier Smart and Whirlpool
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haier and Whirlpool is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Haier Smart 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 Haier Smart Home 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 Haier Smart i.e., Haier Smart and Whirlpool go up and down completely randomly.
Pair Corralation between Haier Smart and Whirlpool
Assuming the 90 days horizon Haier Smart Home is expected to generate 0.98 times more return on investment than Whirlpool. However, Haier Smart Home is 1.02 times less risky than Whirlpool. It trades about 0.02 of its potential returns per unit of risk. Whirlpool is currently generating about 0.0 per unit of risk. If you would invest 1,268 in Haier Smart Home on September 3, 2024 and sell it today you would earn a total of 62.00 from holding Haier Smart Home or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haier Smart Home vs. Whirlpool
Performance |
| Timeline |
| Haier Smart Home |
| Whirlpool |
Haier Smart and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Whirlpool
The main advantage of trading using opposite Haier Smart and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart 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.| Haier Smart vs. Whirlpool | Haier Smart vs. Ethan Allen Interiors | Haier Smart vs. Mohawk Industries | Haier Smart vs. Tempur Sealy International |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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