Correlation Between HAVERTY FURNITURE and X FAB
Can any of the company-specific risk be diversified away by investing in both HAVERTY FURNITURE and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAVERTY FURNITURE A and X FAB Silicon Foundries, you can compare the effects of market volatilities on HAVERTY FURNITURE and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAVERTY FURNITURE and X FAB.
Diversification Opportunities for HAVERTY FURNITURE and X FAB
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between HAVERTY and XFB is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding HAVERTY FURNITURE A and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 A are associated (or correlated) with X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of HAVERTY FURNITURE i.e., HAVERTY FURNITURE and X FAB go up and down completely randomly.
Pair Corralation between HAVERTY FURNITURE and X FAB
Assuming the 90 days trading horizon HAVERTY FURNITURE A is expected to generate 0.6 times more return on investment than X FAB. However, HAVERTY FURNITURE A is 1.66 times less risky than X FAB. It trades about 0.1 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.14 per unit of risk. If you would invest 2,060 in HAVERTY FURNITURE A on November 9, 2024 and sell it today you would earn a total of 60.00 from holding HAVERTY FURNITURE A or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HAVERTY FURNITURE A vs. X FAB Silicon Foundries
Performance |
| Timeline |
| HAVERTY FURNITURE |
| X FAB Silicon |
HAVERTY FURNITURE and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAVERTY FURNITURE and X FAB
The main advantage of trading using opposite HAVERTY FURNITURE and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAVERTY FURNITURE position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| HAVERTY FURNITURE vs. NTT DATA | HAVERTY FURNITURE vs. Northern Data AG | HAVERTY FURNITURE vs. Taiwan Semiconductor Manufacturing | HAVERTY FURNITURE vs. Datadog |
| X FAB vs. Salesforce | X FAB vs. YATRA ONLINE DL 0001 | X FAB vs. Ares Management Corp | X FAB vs. MUTUIONLINE |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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