Correlation Between Mohawk Industries and IRobot
Can any of the company-specific risk be diversified away by investing in both Mohawk Industries and IRobot 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 Mohawk Industries and IRobot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohawk Industries and iRobot, you can compare the effects of market volatilities on Mohawk Industries and IRobot 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 Mohawk Industries with a short position of IRobot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohawk Industries and IRobot.
Diversification Opportunities for Mohawk Industries and IRobot
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mohawk and IRobot is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Industries and iRobot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRobot and Mohawk Industries 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 Mohawk Industries are associated (or correlated) with IRobot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRobot has no effect on the direction of Mohawk Industries i.e., Mohawk Industries and IRobot go up and down completely randomly.
Pair Corralation between Mohawk Industries and IRobot
Considering the 90-day investment horizon Mohawk Industries is expected to generate 0.47 times more return on investment than IRobot. However, Mohawk Industries is 2.11 times less risky than IRobot. It trades about 0.06 of its potential returns per unit of risk. iRobot is currently generating about 0.0 per unit of risk. If you would invest 11,566 in Mohawk Industries on September 2, 2024 and sell it today you would earn a total of 2,317 from holding Mohawk Industries or generate 20.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mohawk Industries vs. iRobot
Performance |
| Timeline |
| Mohawk Industries |
| iRobot |
Mohawk Industries and IRobot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohawk Industries and IRobot
The main advantage of trading using opposite Mohawk Industries and IRobot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohawk Industries position performs unexpectedly, IRobot 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 IRobot will offset losses from the drop in IRobot's long position.| Mohawk Industries vs. Bassett Furniture Industries | Mohawk Industries vs. Ethan Allen Interiors | Mohawk Industries vs. Natuzzi SpA | Mohawk Industries vs. Flexsteel Industries |
| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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