Correlation Between Bassett Furniture and KLX
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and KLX 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 KLX 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 KLX Inc, you can compare the effects of market volatilities on Bassett Furniture and KLX 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 KLX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and KLX.
Diversification Opportunities for Bassett Furniture and KLX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bassett and KLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and KLX Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLX Inc 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 KLX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLX Inc has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and KLX go up and down completely randomly.
Pair Corralation between Bassett Furniture and KLX
If you would invest (100.00) in KLX Inc on September 15, 2024 and sell it today you would earn a total of 100.00 from holding KLX Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bassett Furniture Industries vs. KLX Inc
Performance |
| Timeline |
| Bassett Furniture |
| KLX Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bassett Furniture and KLX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and KLX
The main advantage of trading using opposite Bassett Furniture and KLX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, KLX 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 KLX will offset losses from the drop in KLX's long position.| Bassett Furniture vs. Natuzzi SpA | Bassett Furniture vs. Hamilton Beach Brands | Bassett Furniture vs. La Z Boy Incorporated | Bassett Furniture vs. MasterBrand |
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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