Correlation Between Disney and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Disney and Whirlpool 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 Disney and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Whirlpool, you can compare the effects of market volatilities on Disney and Whirlpool 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 Disney with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Whirlpool.
Diversification Opportunities for Disney and Whirlpool
Average diversification
The 3 months correlation between Disney and Whirlpool is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Disney 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 Walt Disney are associated (or correlated) with Whirlpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whirlpool has no effect on the direction of Disney i.e., Disney and Whirlpool go up and down completely randomly.
Pair Corralation between Disney and Whirlpool
Considering the 90-day investment horizon Walt Disney is expected to generate 0.89 times more return on investment than Whirlpool. However, Walt Disney is 1.12 times less risky than Whirlpool. It trades about 0.02 of its potential returns per unit of risk. Whirlpool is currently generating about -0.03 per unit of risk. If you would invest 10,456 in Walt Disney on January 19, 2024 and sell it today you would earn a total of 838.00 from holding Walt Disney or generate 8.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Walt Disney vs. Whirlpool
Performance |
Timeline |
Walt Disney |
Whirlpool |
Disney and Whirlpool Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Disney and Whirlpool
The main advantage of trading using opposite Disney and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Whirlpool 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 Whirlpool will offset losses from the drop in Whirlpool's long position.Disney vs. Roku Inc | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery | Disney vs. Paramount Global Class |
Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |