Correlation Between IRobot and Mohawk Industries
Can any of the company-specific risk be diversified away by investing in both IRobot and Mohawk Industries 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 IRobot and Mohawk Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Mohawk Industries, you can compare the effects of market volatilities on IRobot and Mohawk Industries 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 IRobot with a short position of Mohawk Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Mohawk Industries.
Diversification Opportunities for IRobot and Mohawk Industries
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IRobot and Mohawk is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding iRobot and Mohawk Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohawk Industries and IRobot 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 iRobot are associated (or correlated) with Mohawk Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohawk Industries has no effect on the direction of IRobot i.e., IRobot and Mohawk Industries go up and down completely randomly.
Pair Corralation between IRobot and Mohawk Industries
Given the investment horizon of 90 days iRobot is expected to under-perform the Mohawk Industries. In addition to that, IRobot is 4.72 times more volatile than Mohawk Industries. It trades about -0.04 of its total potential returns per unit of risk. Mohawk Industries is currently generating about 0.08 per unit of volatility. If you would invest 13,529 in Mohawk Industries on August 31, 2024 and sell it today you would earn a total of 420.50 from holding Mohawk Industries or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iRobot vs. Mohawk Industries
Performance |
| Timeline |
| iRobot |
| Mohawk Industries |
IRobot and Mohawk Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRobot and Mohawk Industries
The main advantage of trading using opposite IRobot and Mohawk Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot position performs unexpectedly, Mohawk Industries 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 Mohawk Industries will offset losses from the drop in Mohawk Industries' long position.| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
| Mohawk Industries vs. Bassett Furniture Industries | Mohawk Industries vs. Ethan Allen Interiors | Mohawk Industries vs. Natuzzi SpA | Mohawk Industries vs. Flexsteel Industries |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |