Correlation Between Whirlpool and Middleby Corp
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Middleby 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 Middleby Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Middleby Corp, you can compare the effects of market volatilities on Whirlpool and Middleby 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 Middleby Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Middleby Corp.
Diversification Opportunities for Whirlpool and Middleby Corp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Whirlpool and Middleby is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Middleby Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middleby Corp 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 Middleby Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middleby Corp has no effect on the direction of Whirlpool i.e., Whirlpool and Middleby Corp go up and down completely randomly.
Pair Corralation between Whirlpool and Middleby Corp
Considering the 90-day investment horizon Whirlpool is expected to under-perform the Middleby Corp. In addition to that, Whirlpool is 1.32 times more volatile than Middleby Corp. It trades about -0.16 of its total potential returns per unit of risk. Middleby Corp is currently generating about -0.18 per unit of volatility. If you would invest 15,469 in Middleby Corp on January 24, 2024 and sell it today you would lose (933.00) from holding Middleby Corp or give up 6.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Middleby Corp
Performance |
| Timeline |
| Whirlpool |
| Middleby Corp |
Whirlpool and Middleby Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Middleby Corp
The main advantage of trading using opposite Whirlpool and Middleby Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Middleby 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 Middleby Corp will offset losses from the drop in Middleby Corp's long position.| Whirlpool vs. Flexsteel Industries | Whirlpool vs. Natuzzi SpA | Whirlpool vs. Crown Crafts | Whirlpool vs. Bassett Furniture Industries |
| Middleby Corp vs. Emerson Electric | Middleby Corp vs. Eaton PLC | Middleby Corp vs. Generac Holdings | Middleby Corp vs. Cummins |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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