Correlation Between Aterian and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Aterian 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 Aterian and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aterian and Hooker Furniture, you can compare the effects of market volatilities on Aterian 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 Aterian with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and Hooker Furniture.
Diversification Opportunities for Aterian and Hooker Furniture
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aterian and Hooker is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Aterian 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 Aterian 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 Aterian i.e., Aterian and Hooker Furniture go up and down completely randomly.
Pair Corralation between Aterian and Hooker Furniture
Given the investment horizon of 90 days Aterian is expected to generate 1.88 times more return on investment than Hooker Furniture. However, Aterian is 1.88 times more volatile than Hooker Furniture. It trades about 0.0 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.0 per unit of risk. If you would invest 378.00 in Aterian on September 2, 2024 and sell it today you would lose (105.00) from holding Aterian or give up 27.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aterian vs. Hooker Furniture
Performance |
| Timeline |
| Aterian |
| Hooker Furniture |
Aterian and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aterian and Hooker Furniture
The main advantage of trading using opposite Aterian and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian 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.| Aterian vs. Energy Focu | Aterian vs. Flexsteel Industries | Aterian vs. Ethan Allen Interiors | Aterian vs. FGI Industries |
| Hooker Furniture vs. Willis Lease Finance | Hooker Furniture vs. Rocky Brands | Hooker Furniture vs. First Business Financial |
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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