Correlation Between MillerKnoll and Whirlpool
Can any of the company-specific risk be diversified away by investing in both MillerKnoll 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 MillerKnoll and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MillerKnoll and Whirlpool, you can compare the effects of market volatilities on MillerKnoll 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 MillerKnoll with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of MillerKnoll and Whirlpool.
Diversification Opportunities for MillerKnoll and Whirlpool
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MillerKnoll and Whirlpool is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MillerKnoll and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and MillerKnoll 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 MillerKnoll 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 MillerKnoll i.e., MillerKnoll and Whirlpool go up and down completely randomly.
Pair Corralation between MillerKnoll and Whirlpool
Given the investment horizon of 90 days MillerKnoll is expected to under-perform the Whirlpool. But the stock apears to be less risky and, when comparing its historical volatility, MillerKnoll is 1.2 times less risky than Whirlpool. The stock trades about -0.07 of its potential returns per unit of risk. The Whirlpool is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,666 in Whirlpool on November 2, 2024 and sell it today you would earn a total of 1,173 from holding Whirlpool or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MillerKnoll vs. Whirlpool
Performance |
| Timeline |
| MillerKnoll |
| Whirlpool |
MillerKnoll and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MillerKnoll and Whirlpool
The main advantage of trading using opposite MillerKnoll and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MillerKnoll 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.| MillerKnoll vs. Bassett Furniture Industries | MillerKnoll vs. Ethan Allen Interiors | MillerKnoll vs. Natuzzi SpA | MillerKnoll 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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