Correlation Between CVC Brasil and Whirlpool

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

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

Diversification Opportunities for CVC Brasil and Whirlpool

0.44

Correlation Coefficient

CVC Brasil  Whirlpool

Very weak diversification

The 3 months correlation between CVC and Whirlpool is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CVC Brasil Operadora and Whirlpool SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool SA and CVC Brasil 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 CVC Brasil Operadora 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 SA has no effect on the direction of CVC Brasil i.e., CVC Brasil and Whirlpool go up and down completely randomly.

Pair Corralation between CVC Brasil and Whirlpool

Assuming the 90 days trading horizon CVC Brasil is expected to generate 9.74 times less return on investment than Whirlpool. In addition to that, CVC Brasil is 1.18 times more volatile than Whirlpool SA. It trades about 0.01 of its total potential returns per unit of risk. Whirlpool SA is currently generating about 0.11 per unit of volatility. If you would invest  364.00  in Whirlpool SA on April 24, 2025 and sell it today you would earn a total of  71.00  from holding Whirlpool SA or generate 19.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

CVC Brasil Operadora  vs.  Whirlpool SA

CVC Brasil Operadora

Risk-Adjusted Performance

Modest

Over the last 90 days CVC Brasil Operadora has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CVC Brasil is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Whirlpool SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Whirlpool SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Whirlpool unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVC Brasil and Whirlpool

The main advantage of trading using opposite CVC Brasil and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVC Brasil 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 CVC Brasil Operadora and Whirlpool SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .