Correlation Between Whirlpool and Fox Corp

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Can any of the company-specific risk be diversified away by investing in both Whirlpool and Fox Corp 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 Fox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Fox Corp Class, you can compare the effects of market volatilities on Whirlpool and Fox Corp 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 Fox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Fox Corp.

Diversification Opportunities for Whirlpool and Fox Corp

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Whirlpool and Fox is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Fox Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Corp Class 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 Fox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Corp Class has no effect on the direction of Whirlpool i.e., Whirlpool and Fox Corp go up and down completely randomly.

Pair Corralation between Whirlpool and Fox Corp

Considering the 90-day investment horizon Whirlpool is expected to generate 1.5 times more return on investment than Fox Corp. However, Whirlpool is 1.5 times more volatile than Fox Corp Class. It trades about 0.0 of its potential returns per unit of risk. Fox Corp Class is currently generating about -0.01 per unit of risk. If you would invest  12,427  in Whirlpool on December 29, 2023 and sell it today you would lose (638.00) from holding Whirlpool or give up 5.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Whirlpool  vs.  Fox Corp Class

 Performance 
       Timeline  
Whirlpool 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Whirlpool has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Whirlpool is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.
Fox Corp Class 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fox Corp may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Whirlpool and Fox Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Whirlpool and Fox Corp

The main advantage of trading using opposite Whirlpool and Fox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Fox Corp 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 Fox Corp will offset losses from the drop in Fox Corp's long position.
The idea behind Whirlpool and Fox Corp Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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