Correlation Between Traeger and Whirlpool

Can any of the company-specific risk be diversified away by investing in both Traeger 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 Traeger and Whirlpool into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Traeger and Whirlpool, you can compare the effects of market volatilities on Traeger 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 Traeger with a short position of Whirlpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traeger and Whirlpool.

Diversification Opportunities for Traeger and Whirlpool

0.68

Correlation Coefficient

Traeger  Whirlpool

Poor diversification

The 3 months correlation between Traeger and Whirlpool is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Traeger and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Traeger 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 Traeger 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 Traeger i.e., Traeger and Whirlpool go up and down completely randomly.

Pair Corralation between Traeger and Whirlpool

Given the investment horizon of 90 days Traeger is expected to under-perform the Whirlpool. But the stock apears to be less risky and, when comparing its historical volatility, Traeger is 1.06 times less risky than Whirlpool. The stock trades about -0.17 of its potential returns per unit of risk. The Whirlpool is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  11,190  in Whirlpool on December 29, 2024 and sell it today you would lose (2,239) from holding Whirlpool or give up 20.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Traeger  vs.  Whirlpool

Traeger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Traeger has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Whirlpool

Risk-Adjusted Performance

Very Weak

Over the last 90 days Whirlpool has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Traeger and Whirlpool

The main advantage of trading using opposite Traeger and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traeger 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.

The idea behind Traeger and Whirlpool 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.