Correlation Between Haverty Furniture and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Summit Materials 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 Haverty Furniture and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haverty Furniture Companies and Summit Materials, you can compare the effects of market volatilities on Haverty Furniture and Summit Materials 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 Haverty Furniture with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Summit Materials.
Diversification Opportunities for Haverty Furniture and Summit Materials
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haverty and Summit is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and Haverty Furniture 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 Haverty Furniture Companies are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Summit Materials go up and down completely randomly.
Pair Corralation between Haverty Furniture and Summit Materials
Assuming the 90 days horizon Haverty Furniture is expected to generate 118.09 times less return on investment than Summit Materials. In addition to that, Haverty Furniture is 1.12 times more volatile than Summit Materials. It trades about 0.0 of its total potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of volatility. If you would invest 2,820 in Summit Materials on September 5, 2024 and sell it today you would earn a total of 2,000 from holding Summit Materials or generate 70.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Summit Materials
Performance |
| Timeline |
| Haverty Furniture |
| Summit Materials |
Haverty Furniture and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Summit Materials
The main advantage of trading using opposite Haverty Furniture and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Haverty Furniture vs. Sumitomo Mitsui Construction | Haverty Furniture vs. Major Drilling Group | Haverty Furniture vs. HYDROFARM HLD GRP | Haverty Furniture vs. WIMFARM SA EO |
| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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