Correlation Between Whirlpool and Aterian
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Aterian 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 Aterian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Aterian, you can compare the effects of market volatilities on Whirlpool and Aterian 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 Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Aterian.
Diversification Opportunities for Whirlpool and Aterian
Pay attention - limited upside
The 3 months correlation between Whirlpool and Aterian is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian 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 Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Whirlpool i.e., Whirlpool and Aterian go up and down completely randomly.
Pair Corralation between Whirlpool and Aterian
Considering the 90-day investment horizon Whirlpool is expected to generate 0.42 times more return on investment than Aterian. However, Whirlpool is 2.38 times less risky than Aterian. It trades about 0.0 of its potential returns per unit of risk. Aterian is currently generating about -0.05 per unit of risk. If you would invest 13,271 in Whirlpool on August 27, 2024 and sell it today you would lose (2,019) from holding Whirlpool or give up 15.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Aterian
Performance |
| Timeline |
| Whirlpool |
| Aterian |
Whirlpool and Aterian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Aterian
The main advantage of trading using opposite Whirlpool and Aterian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Aterian 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 Aterian will offset losses from the drop in Aterian's long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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