Correlation Between Bassett Furniture and Verra Mobility
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Verra Mobility 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 Verra Mobility 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 Verra Mobility Corp, you can compare the effects of market volatilities on Bassett Furniture and Verra Mobility 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 Verra Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Verra Mobility.
Diversification Opportunities for Bassett Furniture and Verra Mobility
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bassett and Verra is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Verra Mobility go up and down completely randomly.
Pair Corralation between Bassett Furniture and Verra Mobility
Given the investment horizon of 90 days Bassett Furniture Industries is expected to under-perform the Verra Mobility. In addition to that, Bassett Furniture is 1.2 times more volatile than Verra Mobility Corp. It trades about -0.01 of its total potential returns per unit of risk. Verra Mobility Corp is currently generating about 0.07 per unit of volatility. If you would invest 1,450 in Verra Mobility Corp on October 7, 2024 and sell it today you would earn a total of 972.00 from holding Verra Mobility Corp or generate 67.03% 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. Verra Mobility Corp
Performance |
| Timeline |
| Bassett Furniture |
| Verra Mobility Corp |
Bassett Furniture and Verra Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Verra Mobility
The main advantage of trading using opposite Bassett Furniture and Verra Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Verra Mobility 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 Verra Mobility will offset losses from the drop in Verra Mobility'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 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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