Correlation Between Whirlpool and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Stag Industrial 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 Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Stag Industrial, you can compare the effects of market volatilities on Whirlpool and Stag Industrial 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 Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Stag Industrial.
Diversification Opportunities for Whirlpool and Stag Industrial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Whirlpool and Stag is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial 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 Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of Whirlpool i.e., Whirlpool and Stag Industrial go up and down completely randomly.
Pair Corralation between Whirlpool and Stag Industrial
Assuming the 90 days horizon Whirlpool is expected to under-perform the Stag Industrial. In addition to that, Whirlpool is 4.28 times more volatile than Stag Industrial. It trades about -0.03 of its total potential returns per unit of risk. Stag Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,211 in Stag Industrial on November 2, 2024 and sell it today you would earn a total of 92.00 from holding Stag Industrial or generate 2.87% 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. Stag Industrial
Performance |
| Timeline |
| Whirlpool |
| Stag Industrial |
Whirlpool and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Stag Industrial
The main advantage of trading using opposite Whirlpool and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Stag Industrial 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 Stag Industrial will offset losses from the drop in Stag Industrial's long position.| Whirlpool vs. China Resources Beer | Whirlpool vs. MOLSON RS BEVERAGE | Whirlpool vs. Tsingtao Brewery | Whirlpool vs. THAI BEVERAGE |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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