Correlation Between Haverty Furniture and CAIRN HOMES
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and CAIRN HOMES 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 CAIRN HOMES 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 CAIRN HOMES EO, you can compare the effects of market volatilities on Haverty Furniture and CAIRN HOMES 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 CAIRN HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and CAIRN HOMES.
Diversification Opportunities for Haverty Furniture and CAIRN HOMES
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haverty and CAIRN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO 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 CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and CAIRN HOMES go up and down completely randomly.
Pair Corralation between Haverty Furniture and CAIRN HOMES
Assuming the 90 days horizon Haverty Furniture Companies is expected to under-perform the CAIRN HOMES. But the stock apears to be less risky and, when comparing its historical volatility, Haverty Furniture Companies is 1.64 times less risky than CAIRN HOMES. The stock trades about -0.22 of its potential returns per unit of risk. The CAIRN HOMES EO is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 225.00 in CAIRN HOMES EO on October 12, 2024 and sell it today you would earn a total of 3.00 from holding CAIRN HOMES EO or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Haverty Furniture Companies vs. CAIRN HOMES EO
Performance |
| Timeline |
| Haverty Furniture |
| CAIRN HOMES EO |
Haverty Furniture and CAIRN HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and CAIRN HOMES
The main advantage of trading using opposite Haverty Furniture and CAIRN HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, CAIRN HOMES 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 CAIRN HOMES will offset losses from the drop in CAIRN HOMES's long position.| Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. NMI Holdings | Haverty Furniture vs. SIVERS SEMICONDUCTORS AB | Haverty Furniture vs. Talanx AG |
| CAIRN HOMES vs. ADDUS HOMECARE | CAIRN HOMES vs. RELIANCE STEEL AL | CAIRN HOMES vs. Corporate Office Properties | CAIRN HOMES vs. Haverty Furniture Companies |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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