Correlation Between Haverty Furniture and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on Haverty Furniture and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and KOWORLD AG.
Diversification Opportunities for Haverty Furniture and KOWORLD AG
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haverty and KOWORLD is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and KOWORLD AG go up and down completely randomly.
Pair Corralation between Haverty Furniture and KOWORLD AG
Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 2.04 times more return on investment than KOWORLD AG. However, Haverty Furniture is 2.04 times more volatile than KOWORLD AG. It trades about -0.03 of its potential returns per unit of risk. KOWORLD AG is currently generating about -0.14 per unit of risk. If you would invest 2,049 in Haverty Furniture Companies on December 9, 2024 and sell it today you would lose (69.00) from holding Haverty Furniture Companies or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. KOWORLD AG
Performance |
| Timeline |
| Haverty Furniture |
| KOWORLD AG |
Haverty Furniture and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and KOWORLD AG
The main advantage of trading using opposite Haverty Furniture and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.| Haverty Furniture vs. SLR Investment Corp | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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