Correlation Between Visteon Corp and Whirlpool

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

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

Diversification Opportunities for Visteon Corp and Whirlpool

0.73

Correlation Coefficient

Visteon Corp  Whirlpool

Poor diversification

The 3 months correlation between Visteon and Whirlpool is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Whirlpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whirlpool and Visteon Corp 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 Visteon Corp 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 Visteon Corp i.e., Visteon Corp and Whirlpool go up and down completely randomly.

Pair Corralation between Visteon Corp and Whirlpool

Allowing for the 90-day total investment horizon Visteon Corp is expected to generate 0.57 times more return on investment than Whirlpool. However, Visteon Corp is 1.77 times less risky than Whirlpool. It trades about 0.16 of its potential returns per unit of risk. Whirlpool is currently generating about -0.35 per unit of risk. If you would invest  10,342  in Visteon Corp on May 4, 2025 and sell it today you would earn a total of  712.00  from holding Visteon Corp or generate 6.88% return on investment over 90 days.

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

Visteon Corp  vs.  Whirlpool

Visteon Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visteon Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Visteon Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Whirlpool

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Whirlpool are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical indicators, Whirlpool may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Visteon Corp and Whirlpool

The main advantage of trading using opposite Visteon Corp and Whirlpool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp 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 Visteon Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.