Correlation Between Whirlpool and Natuzzi SpA
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Natuzzi SpA 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 Natuzzi SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Natuzzi SpA, you can compare the effects of market volatilities on Whirlpool and Natuzzi SpA 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 Natuzzi SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Natuzzi SpA.
Diversification Opportunities for Whirlpool and Natuzzi SpA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Whirlpool and Natuzzi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Natuzzi SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natuzzi SpA 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 Natuzzi SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natuzzi SpA has no effect on the direction of Whirlpool i.e., Whirlpool and Natuzzi SpA go up and down completely randomly.
Pair Corralation between Whirlpool and Natuzzi SpA
Considering the 90-day investment horizon Whirlpool is expected to generate 1.2 times less return on investment than Natuzzi SpA. But when comparing it to its historical volatility, Whirlpool is 1.8 times less risky than Natuzzi SpA. It trades about 0.23 of its potential returns per unit of risk. Natuzzi SpA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 430.00 in Natuzzi SpA on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Natuzzi SpA or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Whirlpool vs. Natuzzi SpA
Performance |
| Timeline |
| Whirlpool |
| Natuzzi SpA |
Whirlpool and Natuzzi SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Natuzzi SpA
The main advantage of trading using opposite Whirlpool and Natuzzi SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Natuzzi SpA 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 Natuzzi SpA will offset losses from the drop in Natuzzi SpA's long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
| Natuzzi SpA vs. Bassett Furniture Industries | Natuzzi SpA vs. Hooker Furniture | Natuzzi SpA vs. Flexsteel Industries | Natuzzi SpA vs. Ethan Allen Interiors |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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