Correlation Between Mohawk Industries and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Mohawk Industries 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 Mohawk Industries and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohawk Industries and Whirlpool, you can compare the effects of market volatilities on Mohawk Industries 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 Mohawk Industries with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohawk Industries and Whirlpool.
Diversification Opportunities for Mohawk Industries and Whirlpool
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mohawk and Whirlpool is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Industries and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool 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 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 Mohawk Industries i.e., Mohawk Industries and Whirlpool go up and down completely randomly.
Pair Corralation between Mohawk Industries and Whirlpool
Considering the 90-day investment horizon Mohawk Industries is expected to under-perform the Whirlpool. In addition to that, Mohawk Industries is 1.17 times more volatile than Whirlpool. It trades about -0.09 of its total potential returns per unit of risk. Whirlpool is currently generating about 0.22 per unit of volatility. If you would invest 9,776 in Whirlpool on August 24, 2024 and sell it today you would earn a total of 1,428 from holding Whirlpool or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mohawk Industries vs. Whirlpool
Performance |
| Timeline |
| Mohawk Industries |
| Whirlpool |
Mohawk Industries and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohawk Industries and Whirlpool
The main advantage of trading using opposite Mohawk Industries and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohawk Industries 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.| Mohawk Industries vs. Bassett Furniture Industries | Mohawk Industries vs. Ethan Allen Interiors | Mohawk Industries vs. Natuzzi SpA | Mohawk Industries vs. Flexsteel Industries |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |