Correlation Between Whirlpool and MPH Health
Can any of the company-specific risk be diversified away by investing in both Whirlpool and MPH Health 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 MPH Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and MPH Health Care, you can compare the effects of market volatilities on Whirlpool and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and MPH Health.
Diversification Opportunities for Whirlpool and MPH Health
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Whirlpool and MPH is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of Whirlpool i.e., Whirlpool and MPH Health go up and down completely randomly.
Pair Corralation between Whirlpool and MPH Health
Assuming the 90 days horizon Whirlpool is expected to generate 1.43 times more return on investment than MPH Health. However, Whirlpool is 1.43 times more volatile than MPH Health Care. It trades about 0.34 of its potential returns per unit of risk. MPH Health Care is currently generating about 0.2 per unit of risk. If you would invest 10,970 in Whirlpool on October 23, 2024 and sell it today you would earn a total of 1,340 from holding Whirlpool or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Whirlpool vs. MPH Health Care
Performance |
| Timeline |
| Whirlpool |
| MPH Health Care |
Whirlpool and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and MPH Health
The main advantage of trading using opposite Whirlpool and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| Whirlpool vs. MPH Health Care | Whirlpool vs. Fevertree Drinks PLC | Whirlpool vs. EPSILON HEALTHCARE LTD | Whirlpool vs. CLEAN ENERGY FUELS |
| MPH Health vs. Westinghouse Air Brake | MPH Health vs. FAIR ISAAC | MPH Health vs. Compugroup Medical SE | MPH Health vs. PULSION Medical Systems |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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