Correlation Between Whirlpool and Tempur Sealy
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Tempur Sealy 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 Tempur Sealy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Tempur Sealy International, you can compare the effects of market volatilities on Whirlpool and Tempur Sealy 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 Tempur Sealy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Tempur Sealy.
Diversification Opportunities for Whirlpool and Tempur Sealy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Whirlpool and Tempur is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Tempur Sealy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempur Sealy Interna 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 Tempur Sealy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempur Sealy Interna has no effect on the direction of Whirlpool i.e., Whirlpool and Tempur Sealy go up and down completely randomly.
Pair Corralation between Whirlpool and Tempur Sealy
Considering the 90-day investment horizon Whirlpool is expected to generate 1.25 times more return on investment than Tempur Sealy. However, Whirlpool is 1.25 times more volatile than Tempur Sealy International. It trades about 0.11 of its potential returns per unit of risk. Tempur Sealy International is currently generating about 0.08 per unit of risk. If you would invest 9,666 in Whirlpool on September 2, 2024 and sell it today you would earn a total of 1,476 from holding Whirlpool or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Tempur Sealy International
Performance |
| Timeline |
| Whirlpool |
| Tempur Sealy Interna |
Whirlpool and Tempur Sealy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Tempur Sealy
The main advantage of trading using opposite Whirlpool and Tempur Sealy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Tempur Sealy 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 Tempur Sealy will offset losses from the drop in Tempur Sealy's long position.| Whirlpool vs. Energy Focu | Whirlpool vs. Flexsteel Industries | Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. FGI Industries |
| Tempur Sealy vs. La Z Boy Incorporated | Tempur Sealy vs. Purple Innovation | Tempur Sealy vs. MasterBrand | Tempur Sealy 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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