Correlation Between Whirlpool and Richelieu Hardware
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Richelieu Hardware 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 Richelieu Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Richelieu Hardware, you can compare the effects of market volatilities on Whirlpool and Richelieu Hardware 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 Richelieu Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Richelieu Hardware.
Diversification Opportunities for Whirlpool and Richelieu Hardware
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Whirlpool and Richelieu is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Richelieu Hardware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richelieu Hardware 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 Richelieu Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richelieu Hardware has no effect on the direction of Whirlpool i.e., Whirlpool and Richelieu Hardware go up and down completely randomly.
Pair Corralation between Whirlpool and Richelieu Hardware
Considering the 90-day investment horizon Whirlpool is expected to generate 3.44 times more return on investment than Richelieu Hardware. However, Whirlpool is 3.44 times more volatile than Richelieu Hardware. It trades about 0.16 of its potential returns per unit of risk. Richelieu Hardware is currently generating about 0.25 per unit of risk. If you would invest 11,228 in Whirlpool on September 15, 2024 and sell it today you would earn a total of 1,055 from holding Whirlpool or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Whirlpool vs. Richelieu Hardware
Performance |
| Timeline |
| Whirlpool |
| Richelieu Hardware |
Whirlpool and Richelieu Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Richelieu Hardware
The main advantage of trading using opposite Whirlpool and Richelieu Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Richelieu Hardware 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 Richelieu Hardware will offset losses from the drop in Richelieu Hardware's long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
| Richelieu Hardware vs. Kewaunee Scientific | Richelieu Hardware vs. Hamilton Beach Brands | Richelieu Hardware vs. Mohawk Industries | Richelieu Hardware vs. Whirlpool |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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