Correlation Between Albertsons Companies and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Hooker Furniture 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 Albertsons Companies and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Hooker Furniture, you can compare the effects of market volatilities on Albertsons Companies and Hooker Furniture 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 Albertsons Companies with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Hooker Furniture.
Diversification Opportunities for Albertsons Companies and Hooker Furniture
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Albertsons and Hooker is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Hooker Furniture go up and down completely randomly.
Pair Corralation between Albertsons Companies and Hooker Furniture
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.41 times more return on investment than Hooker Furniture. However, Albertsons Companies is 2.43 times less risky than Hooker Furniture. It trades about 0.13 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.04 per unit of risk. If you would invest 1,836 in Albertsons Companies on August 30, 2024 and sell it today you would earn a total of 126.00 from holding Albertsons Companies or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Hooker Furniture
Performance |
| Timeline |
| Albertsons Companies |
| Hooker Furniture |
Albertsons Companies and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Hooker Furniture
The main advantage of trading using opposite Albertsons Companies and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Hooker Furniture 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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