Correlation Between Bassett Furniture and Compass Digital
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Compass Digital 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 Compass Digital 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 Compass Digital Acquisition, you can compare the effects of market volatilities on Bassett Furniture and Compass Digital 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 Compass Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Compass Digital.
Diversification Opportunities for Bassett Furniture and Compass Digital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bassett and Compass is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Compass Digital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Digital Acqu 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 Compass Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Digital Acqu has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Compass Digital go up and down completely randomly.
Pair Corralation between Bassett Furniture and Compass Digital
If you would invest 6.33 in Compass Digital Acquisition on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Compass Digital Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Compass Digital Acquisition
Performance |
| Timeline |
| Bassett Furniture |
| Compass Digital Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Bassett Furniture and Compass Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Compass Digital
The main advantage of trading using opposite Bassett Furniture and Compass Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Compass Digital 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 Compass Digital will offset losses from the drop in Compass Digital'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 |
| Compass Digital vs. Hasbro Inc | Compass Digital vs. United Parks Resorts | Compass Digital vs. SL Green Realty | Compass Digital vs. Bassett Furniture Industries |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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