Correlation Between Bassett Furniture and Hudson Pacific
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Hudson Pacific 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 Hudson Pacific 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 Hudson Pacific Properties, you can compare the effects of market volatilities on Bassett Furniture and Hudson Pacific 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 Hudson Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Hudson Pacific.
Diversification Opportunities for Bassett Furniture and Hudson Pacific
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bassett and Hudson is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties 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 Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Hudson Pacific go up and down completely randomly.
Pair Corralation between Bassett Furniture and Hudson Pacific
Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 0.34 times more return on investment than Hudson Pacific. However, Bassett Furniture Industries is 2.95 times less risky than Hudson Pacific. It trades about 0.21 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about -0.06 per unit of risk. If you would invest 1,392 in Bassett Furniture Industries on August 30, 2024 and sell it today you would earn a total of 116.00 from holding Bassett Furniture Industries or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Hudson Pacific Properties
Performance |
| Timeline |
| Bassett Furniture |
| Hudson Pacific Properties |
Bassett Furniture and Hudson Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Hudson Pacific
The main advantage of trading using opposite Bassett Furniture and Hudson Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Hudson Pacific 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 Hudson Pacific will offset losses from the drop in Hudson Pacific'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 |
| Hudson Pacific vs. Boston Properties | Hudson Pacific vs. Douglas Emmett | Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Alexandria Real Estate |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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