Correlation Between Bassett Furniture and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Rocky Brands 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 Rocky Brands 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 Rocky Brands, you can compare the effects of market volatilities on Bassett Furniture and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Rocky Brands.
Diversification Opportunities for Bassett Furniture and Rocky Brands
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bassett and Rocky is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Rocky Brands go up and down completely randomly.
Pair Corralation between Bassett Furniture and Rocky Brands
Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 0.28 times more return on investment than Rocky Brands. However, Bassett Furniture Industries is 3.58 times less risky than Rocky Brands. It trades about 0.21 of its potential returns per unit of risk. Rocky Brands is currently generating about -0.14 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Rocky Brands
Performance |
| Timeline |
| Bassett Furniture |
| Rocky Brands |
Bassett Furniture and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Rocky Brands
The main advantage of trading using opposite Bassett Furniture and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' 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 |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |