Correlation Between Arhaus and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Arhaus and Haverty 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 Arhaus and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arhaus Inc and Haverty Furniture Companies, you can compare the effects of market volatilities on Arhaus and Haverty 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 Arhaus with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arhaus and Haverty Furniture.
Diversification Opportunities for Arhaus and Haverty Furniture
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arhaus and Haverty is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Arhaus Inc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Arhaus 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 Arhaus Inc are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Arhaus i.e., Arhaus and Haverty Furniture go up and down completely randomly.
Pair Corralation between Arhaus and Haverty Furniture
Given the investment horizon of 90 days Arhaus Inc is expected to generate 1.46 times more return on investment than Haverty Furniture. However, Arhaus is 1.46 times more volatile than Haverty Furniture Companies. It trades about 0.02 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.0 per unit of risk. If you would invest 995.00 in Arhaus Inc on August 28, 2024 and sell it today you would earn a total of 72.00 from holding Arhaus Inc or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arhaus Inc vs. Haverty Furniture Companies
Performance |
| Timeline |
| Arhaus Inc |
| Haverty Furniture |
Arhaus and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arhaus and Haverty Furniture
The main advantage of trading using opposite Arhaus and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arhaus position performs unexpectedly, Haverty 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.The idea behind Arhaus Inc and Haverty Furniture Companies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures | Haverty Furniture vs. Kirklands | Haverty Furniture vs. Arhaus Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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