Correlation Between Bassett Furniture and Crown Crafts
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Crown Crafts 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 Crown Crafts 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 Crown Crafts, you can compare the effects of market volatilities on Bassett Furniture and Crown Crafts 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 Crown Crafts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Crown Crafts.
Diversification Opportunities for Bassett Furniture and Crown Crafts
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bassett and Crown is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Crown Crafts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Crafts 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 Crown Crafts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Crafts has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Crown Crafts go up and down completely randomly.
Pair Corralation between Bassett Furniture and Crown Crafts
Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 2.08 times more return on investment than Crown Crafts. However, Bassett Furniture is 2.08 times more volatile than Crown Crafts. It trades about 0.04 of its potential returns per unit of risk. Crown Crafts is currently generating about -0.01 per unit of risk. If you would invest 1,375 in Bassett Furniture Industries on November 2, 2024 and sell it today you would earn a total of 87.00 from holding Bassett Furniture Industries or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Crown Crafts
Performance |
| Timeline |
| Bassett Furniture |
| Crown Crafts |
Bassett Furniture and Crown Crafts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Crown Crafts
The main advantage of trading using opposite Bassett Furniture and Crown Crafts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Crown Crafts 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 Crown Crafts will offset losses from the drop in Crown Crafts' 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 |
| Crown Crafts vs. Bassett Furniture Industries | Crown Crafts vs. Hooker Furniture | Crown Crafts vs. Natuzzi SpA | Crown Crafts vs. Flexsteel 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |