Correlation Between Whirlpool and PT Ace
Can any of the company-specific risk be diversified away by investing in both Whirlpool and PT Ace 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 Whirlpool and PT Ace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and PT Ace Hardware, you can compare the effects of market volatilities on Whirlpool and PT Ace 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 Whirlpool with a short position of PT Ace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and PT Ace.
Diversification Opportunities for Whirlpool and PT Ace
Very good diversification
The 3 months correlation between Whirlpool and 4AH1 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and PT Ace Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Ace Hardware and Whirlpool 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 Whirlpool are associated (or correlated) with PT Ace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Ace Hardware has no effect on the direction of Whirlpool i.e., Whirlpool and PT Ace go up and down completely randomly.
Pair Corralation between Whirlpool and PT Ace
Assuming the 90 days horizon Whirlpool is expected to under-perform the PT Ace. But the stock apears to be less risky and, when comparing its historical volatility, Whirlpool is 3.42 times less risky than PT Ace. The stock trades about -0.03 of its potential returns per unit of risk. The PT Ace Hardware is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.80 in PT Ace Hardware on November 2, 2024 and sell it today you would earn a total of 0.40 from holding PT Ace Hardware or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. PT Ace Hardware
Performance |
| Timeline |
| Whirlpool |
| PT Ace Hardware |
Whirlpool and PT Ace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and PT Ace
The main advantage of trading using opposite Whirlpool and PT Ace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, PT Ace 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 PT Ace will offset losses from the drop in PT Ace's long position.| Whirlpool vs. China Resources Beer | Whirlpool vs. MOLSON RS BEVERAGE | Whirlpool vs. Tsingtao Brewery | Whirlpool vs. THAI BEVERAGE |
| PT Ace vs. Superior Plus Corp | PT Ace vs. Origin Agritech | PT Ace vs. Identiv | PT Ace vs. INTUITIVE SURGICAL |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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