Correlation Between Porto Seguro and Whirlpool

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

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

Diversification Opportunities for Porto Seguro and Whirlpool

0.77

Correlation Coefficient

Porto Seguro  Whirlpool

Poor diversification

The 3 months correlation between Porto and Whirlpool is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Porto Seguro SA and Whirlpool SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool SA and Porto Seguro 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 Porto Seguro SA 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 Porto Seguro i.e., Porto Seguro and Whirlpool go up and down completely randomly.

Pair Corralation between Porto Seguro and Whirlpool

Assuming the 90 days trading horizon Porto Seguro SA is expected to generate 0.54 times more return on investment than Whirlpool. However, Porto Seguro SA is 1.85 times less risky than Whirlpool. It trades about 0.23 of its potential returns per unit of risk. Whirlpool SA is currently generating about 0.11 per unit of risk. If you would invest  4,123  in Porto Seguro SA on April 23, 2025 and sell it today you would earn a total of  1,082  from holding Porto Seguro SA or generate 26.24% return on investment over 90 days.

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

Porto Seguro SA  vs.  Whirlpool SA

Porto Seguro SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Porto Seguro SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Porto Seguro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Whirlpool SA

Risk-Adjusted Performance

Insignificant

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 Porto Seguro and Whirlpool

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

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.