Correlation Between Bassett Furniture and Aequi Acquisition
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Aequi Acquisition 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 Bassett Furniture and Aequi Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bassett Furniture Industries and Aequi Acquisition Corp, you can compare the effects of market volatilities on Bassett Furniture and Aequi Acquisition 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 Bassett Furniture with a short position of Aequi Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Aequi Acquisition.
Diversification Opportunities for Bassett Furniture and Aequi Acquisition
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bassett and Aequi is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Aequi Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequi Acquisition Corp and Bassett 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 Bassett Furniture Industries are associated (or correlated) with Aequi Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequi Acquisition Corp has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Aequi Acquisition go up and down completely randomly.
Pair Corralation between Bassett Furniture and Aequi Acquisition
If you would invest 1,040 in Aequi Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Aequi Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Aequi Acquisition Corp
Performance |
| Timeline |
| Bassett Furniture |
| Aequi Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bassett Furniture and Aequi Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Aequi Acquisition
The main advantage of trading using opposite Bassett Furniture and Aequi Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Aequi Acquisition 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 Aequi Acquisition will offset losses from the drop in Aequi Acquisition's long position.| Bassett Furniture vs. Hooker Furniture | Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Haverty Furniture Companies | Bassett Furniture vs. La Z Boy Incorporated |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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