Correlation Between Vail Resorts and Whirlpool
Can any of the company-specific risk be diversified away by investing in both Vail Resorts 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 Vail Resorts and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vail Resorts and Whirlpool, you can compare the effects of market volatilities on Vail Resorts 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 Vail Resorts with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vail Resorts and Whirlpool.
Diversification Opportunities for Vail Resorts and Whirlpool
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vail and Whirlpool is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Vail Resorts 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 Vail Resorts 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 Vail Resorts i.e., Vail Resorts and Whirlpool go up and down completely randomly.
Pair Corralation between Vail Resorts and Whirlpool
Considering the 90-day investment horizon Vail Resorts is expected to under-perform the Whirlpool. But the stock apears to be less risky and, when comparing its historical volatility, Vail Resorts is 1.22 times less risky than Whirlpool. The stock trades about -0.2 of its potential returns per unit of risk. The Whirlpool is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 11,223 in Whirlpool on January 26, 2024 and sell it today you would lose (655.00) from holding Whirlpool or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vail Resorts vs. Whirlpool
Performance |
| Timeline |
| Vail Resorts |
| Whirlpool |
Vail Resorts and Whirlpool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vail Resorts and Whirlpool
The main advantage of trading using opposite Vail Resorts and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vail Resorts 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.| Vail Resorts vs. Marriot Vacations Worldwide | Vail Resorts vs. Monarch Casino Resort | Vail Resorts vs. Studio City International | Vail Resorts vs. Hilton Grand Vacations |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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