Correlation Between Whirlpool and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Polestar Automotive 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 Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Polestar Automotive Holding, you can compare the effects of market volatilities on Whirlpool and Polestar Automotive 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 Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Polestar Automotive.
Diversification Opportunities for Whirlpool and Polestar Automotive
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Whirlpool and Polestar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive 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 Polestar Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polestar Automotive has no effect on the direction of Whirlpool i.e., Whirlpool and Polestar Automotive go up and down completely randomly.
Pair Corralation between Whirlpool and Polestar Automotive
Considering the 90-day investment horizon Whirlpool is expected to generate 0.27 times more return on investment than Polestar Automotive. However, Whirlpool is 3.73 times less risky than Polestar Automotive. It trades about -0.01 of its potential returns per unit of risk. Polestar Automotive Holding is currently generating about 0.0 per unit of risk. If you would invest 13,075 in Whirlpool on August 31, 2024 and sell it today you would lose (1,933) from holding Whirlpool or give up 14.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Polestar Automotive Holding
Performance |
| Timeline |
| Whirlpool |
| Polestar Automotive |
Whirlpool and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Polestar Automotive
The main advantage of trading using opposite Whirlpool and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Polestar Automotive 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 Polestar Automotive will offset losses from the drop in Polestar Automotive's long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Aston Martin Lagonda |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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