Correlation Between Haverty Furniture and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Eidesvik Offshore 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 Eidesvik Offshore 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 Eidesvik Offshore ASA, you can compare the effects of market volatilities on Haverty Furniture and Eidesvik Offshore 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 Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Eidesvik Offshore.
Diversification Opportunities for Haverty Furniture and Eidesvik Offshore
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haverty and Eidesvik is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA 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 Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Haverty Furniture and Eidesvik Offshore
Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 2.0 times more return on investment than Eidesvik Offshore. However, Haverty Furniture is 2.0 times more volatile than Eidesvik Offshore ASA. It trades about 0.24 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.04 per unit of risk. If you would invest 1,951 in Haverty Furniture Companies on September 4, 2024 and sell it today you would earn a total of 289.00 from holding Haverty Furniture Companies or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Haverty Furniture |
| Eidesvik Offshore ASA |
Haverty Furniture and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Eidesvik Offshore
The main advantage of trading using opposite Haverty Furniture and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Eidesvik Offshore 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 Eidesvik Offshore will offset losses from the drop in Eidesvik Offshore's long position.| Haverty Furniture vs. SBM OFFSHORE | Haverty Furniture vs. Zijin Mining Group | Haverty Furniture vs. MACOM Technology Solutions | Haverty Furniture vs. BW OFFSHORE LTD |
| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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