Correlation Between Whirlpool and Celanese
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Celanese 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 Celanese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Celanese, you can compare the effects of market volatilities on Whirlpool and Celanese 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 Celanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Celanese.
Diversification Opportunities for Whirlpool and Celanese
Very weak diversification
The 3 months correlation between Whirlpool and Celanese is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Celanese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celanese 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 Celanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celanese has no effect on the direction of Whirlpool i.e., Whirlpool and Celanese go up and down completely randomly.
Pair Corralation between Whirlpool and Celanese
Considering the 90-day investment horizon Whirlpool is expected to under-perform the Celanese. In addition to that, Whirlpool is 1.36 times more volatile than Celanese. It trades about -0.05 of its total potential returns per unit of risk. Celanese is currently generating about 0.08 per unit of volatility. If you would invest 12,466 in Celanese on January 24, 2024 and sell it today you would earn a total of 3,028 from holding Celanese or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Celanese
Performance |
| Timeline |
| Whirlpool |
| Celanese |
Whirlpool and Celanese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Celanese
The main advantage of trading using opposite Whirlpool and Celanese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Celanese 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 Celanese will offset losses from the drop in Celanese's long position.| Whirlpool vs. Flexsteel Industries | Whirlpool vs. Natuzzi SpA | Whirlpool vs. Crown Crafts | Whirlpool vs. Bassett Furniture Industries |
| Celanese vs. Huntsman | Celanese vs. Lsb Industries | Celanese vs. Westlake Chemical Partners | Celanese vs. Green Plains Renewable |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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