Correlation Between Rossi Residencial and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Rossi Residencial 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 Rossi Residencial and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rossi Residencial SA and Whirlpool SA, you can compare the effects of market volatilities on Rossi Residencial 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 Rossi Residencial with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rossi Residencial and Whirlpool.
Diversification Opportunities for Rossi Residencial and Whirlpool
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Rossi and Whirlpool is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rossi Residencial SA and Whirlpool SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool SA and Rossi Residencial 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 Rossi Residencial SA 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 SA has no effect on the direction of Rossi Residencial i.e., Rossi Residencial and Whirlpool go up and down completely randomly.
Pair Corralation between Rossi Residencial and Whirlpool
Assuming the 90 days trading horizon Rossi Residencial SA is expected to generate 1.28 times more return on investment than Whirlpool. However, Rossi Residencial is 1.28 times more volatile than Whirlpool SA. It trades about 0.03 of its potential returns per unit of risk. Whirlpool SA is currently generating about 0.01 per unit of risk. If you would invest 244.00 in Rossi Residencial SA on August 30, 2024 and sell it today you would earn a total of 84.00 from holding Rossi Residencial SA or generate 34.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rossi Residencial SA vs. Whirlpool SA
Performance |
| Timeline |
| Rossi Residencial |
| Whirlpool SA |
Rossi Residencial and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rossi Residencial and Whirlpool
The main advantage of trading using opposite Rossi Residencial and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rossi Residencial 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.| Rossi Residencial vs. Gafisa SA | Rossi Residencial vs. PDG Realty SA | Rossi Residencial vs. Cyrela Brazil Realty | Rossi Residencial vs. MRV Engenharia e |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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