Correlation Between Urban Outfitters and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters 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 Urban Outfitters and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and Whirlpool, you can compare the effects of market volatilities on Urban Outfitters 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 Urban Outfitters with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and Whirlpool.
Diversification Opportunities for Urban Outfitters and Whirlpool
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and Whirlpool is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Urban Outfitters 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 Urban Outfitters 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 Urban Outfitters i.e., Urban Outfitters and Whirlpool go up and down completely randomly.
Pair Corralation between Urban Outfitters and Whirlpool
Assuming the 90 days horizon Urban Outfitters is expected to generate 0.69 times more return on investment than Whirlpool. However, Urban Outfitters is 1.45 times less risky than Whirlpool. It trades about 0.01 of its potential returns per unit of risk. Whirlpool is currently generating about -0.03 per unit of risk. If you would invest 5,300 in Urban Outfitters on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Urban Outfitters or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. Whirlpool
Performance |
| Timeline |
| Urban Outfitters |
| Whirlpool |
Urban Outfitters and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and Whirlpool
The main advantage of trading using opposite Urban Outfitters and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters 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.| Urban Outfitters vs. Firan Technology Group | Urban Outfitters vs. AMAG Austria Metall | Urban Outfitters vs. Cognizant Technology Solutions | Urban Outfitters vs. Transport International Holdings |
| Whirlpool vs. China Resources Beer | Whirlpool vs. MOLSON RS BEVERAGE | Whirlpool vs. Tsingtao Brewery | Whirlpool vs. THAI BEVERAGE |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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