Correlation Between Whirlpool and FGI Industries
Can any of the company-specific risk be diversified away by investing in both Whirlpool and FGI Industries 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 FGI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and FGI Industries, you can compare the effects of market volatilities on Whirlpool and FGI Industries 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 FGI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and FGI Industries.
Diversification Opportunities for Whirlpool and FGI Industries
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Whirlpool and FGI is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and FGI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGI Industries 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 FGI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGI Industries has no effect on the direction of Whirlpool i.e., Whirlpool and FGI Industries go up and down completely randomly.
Pair Corralation between Whirlpool and FGI Industries
Considering the 90-day investment horizon Whirlpool is expected to generate 0.48 times more return on investment than FGI Industries. However, Whirlpool is 2.08 times less risky than FGI Industries. It trades about 0.03 of its potential returns per unit of risk. FGI Industries is currently generating about -0.01 per unit of risk. If you would invest 11,200 in Whirlpool on September 14, 2024 and sell it today you would earn a total of 976.50 from holding Whirlpool or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. FGI Industries
Performance |
| Timeline |
| Whirlpool |
| FGI Industries |
Whirlpool and FGI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and FGI Industries
The main advantage of trading using opposite Whirlpool and FGI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, FGI Industries 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 FGI Industries will offset losses from the drop in FGI Industries' long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
| FGI Industries vs. Fundamental Global | FGI Industries vs. Yoshitsu Co Ltd | FGI Industries vs. Hour Loop | FGI Industries vs. Direct Digital Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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