Correlation Between Bassett Furniture and Environmental Service
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Environmental Service 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 Environmental Service 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 Environmental Service Professionals, you can compare the effects of market volatilities on Bassett Furniture and Environmental Service 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 Environmental Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Environmental Service.
Diversification Opportunities for Bassett Furniture and Environmental Service
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bassett and Environmental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Environmental Service Professi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Environmental Service 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 Environmental Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Environmental Service has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Environmental Service go up and down completely randomly.
Pair Corralation between Bassett Furniture and Environmental Service
Given the investment horizon of 90 days Bassett Furniture is expected to generate 482.95 times less return on investment than Environmental Service. But when comparing it to its historical volatility, Bassett Furniture Industries is 35.72 times less risky than Environmental Service. It trades about 0.01 of its potential returns per unit of risk. Environmental Service Professionals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Environmental Service Professionals on September 12, 2024 and sell it today you would earn a total of 0.01 from holding Environmental Service Professionals or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 57.67% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Environmental Service Professi
Performance |
| Timeline |
| Bassett Furniture |
| Environmental Service |
Bassett Furniture and Environmental Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Environmental Service
The main advantage of trading using opposite Bassett Furniture and Environmental Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Environmental Service 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 Environmental Service will offset losses from the drop in Environmental Service'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 |
| Environmental Service vs. Comstock Holding Companies | Environmental Service vs. Meiwu Technology Co | Environmental Service vs. Western Asset Investment | Environmental Service vs. Western Digital |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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