Correlation Between Haverty Furniture and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and APPLIED 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 APPLIED 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 APPLIED MATERIALS, you can compare the effects of market volatilities on Haverty Furniture and APPLIED 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and APPLIED MATERIALS.
Diversification Opportunities for Haverty Furniture and APPLIED MATERIALS
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haverty and APPLIED is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Haverty Furniture and APPLIED MATERIALS
Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 1.09 times more return on investment than APPLIED MATERIALS. However, Haverty Furniture is 1.09 times more volatile than APPLIED MATERIALS. It trades about 0.22 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about -0.02 per unit of risk. If you would invest 1,971 in Haverty Furniture Companies on September 2, 2024 and sell it today you would earn a total of 269.00 from holding Haverty Furniture Companies or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. APPLIED MATERIALS
Performance |
| Timeline |
| Haverty Furniture |
| APPLIED MATERIALS |
Haverty Furniture and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and APPLIED MATERIALS
The main advantage of trading using opposite Haverty Furniture and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, APPLIED 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. Origin Agritech | Haverty Furniture vs. Identiv |
| APPLIED MATERIALS vs. SBM OFFSHORE | APPLIED MATERIALS vs. Wizz Air Holdings | APPLIED MATERIALS vs. Selective Insurance Group | APPLIED MATERIALS vs. Japan Post Insurance |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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