Correlation Between Bassett Furniture and Welsbach Technology
Can any of the company-specific risk be diversified away by investing in both Bassett Furniture and Welsbach Technology 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 Welsbach Technology 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 Welsbach Technology Metals, you can compare the effects of market volatilities on Bassett Furniture and Welsbach Technology 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 Welsbach Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and Welsbach Technology.
Diversification Opportunities for Bassett Furniture and Welsbach Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bassett and Welsbach is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and Welsbach Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welsbach Technology 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 Welsbach Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welsbach Technology has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and Welsbach Technology go up and down completely randomly.
Pair Corralation between Bassett Furniture and Welsbach Technology
Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 6.91 times more return on investment than Welsbach Technology. However, Bassett Furniture is 6.91 times more volatile than Welsbach Technology Metals. It trades about 0.02 of its potential returns per unit of risk. Welsbach Technology Metals is currently generating about 0.05 per unit of risk. If you would invest 1,363 in Bassett Furniture Industries on August 31, 2024 and sell it today you would earn a total of 160.00 from holding Bassett Furniture Industries or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bassett Furniture Industries vs. Welsbach Technology Metals
Performance |
| Timeline |
| Bassett Furniture |
| Welsbach Technology |
Bassett Furniture and Welsbach Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bassett Furniture and Welsbach Technology
The main advantage of trading using opposite Bassett Furniture and Welsbach Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bassett Furniture position performs unexpectedly, Welsbach Technology 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 Welsbach Technology will offset losses from the drop in Welsbach Technology'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 |
| Welsbach Technology vs. Kaiser Aluminum | Welsbach Technology vs. Bassett Furniture Industries | Welsbach Technology vs. Ironveld Plc | Welsbach Technology vs. SBM Offshore NV |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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