Correlation Between Whirlpool and Under Armour
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Under Armour C, you can compare the effects of market volatilities on Whirlpool and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Under Armour.
Diversification Opportunities for Whirlpool and Under Armour
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Whirlpool and Under is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Whirlpool i.e., Whirlpool and Under Armour go up and down completely randomly.
Pair Corralation between Whirlpool and Under Armour
Considering the 90-day investment horizon Whirlpool is expected to under-perform the Under Armour. In addition to that, Whirlpool is 1.43 times more volatile than Under Armour C. It trades about -0.15 of its total potential returns per unit of risk. Under Armour C is currently generating about -0.11 per unit of volatility. If you would invest 683.00 in Under Armour C on January 25, 2024 and sell it today you would lose (25.00) from holding Under Armour C or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Under Armour C
Performance |
| Timeline |
| Whirlpool |
| Under Armour C |
Whirlpool and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Under Armour
The main advantage of trading using opposite Whirlpool and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Whirlpool vs. Ethan Allen Interiors | Whirlpool vs. Mohawk Industries | Whirlpool vs. Tempur Sealy International | Whirlpool vs. MillerKnoll |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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