Correlation Between CHINA EDUCATION and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and Haverty Furniture 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 CHINA EDUCATION and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Haverty Furniture Companies, you can compare the effects of market volatilities on CHINA EDUCATION and Haverty Furniture 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 CHINA EDUCATION with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Haverty Furniture.
Diversification Opportunities for CHINA EDUCATION and Haverty Furniture
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and Haverty is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and Haverty Furniture go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Haverty Furniture
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to generate 1.43 times more return on investment than Haverty Furniture. However, CHINA EDUCATION is 1.43 times more volatile than Haverty Furniture Companies. It trades about 0.11 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.09 per unit of risk. If you would invest 39.00 in CHINA EDUCATION GROUP on November 4, 2024 and sell it today you would earn a total of 2.00 from holding CHINA EDUCATION GROUP or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Haverty Furniture Companies
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Haverty Furniture |
CHINA EDUCATION and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Haverty Furniture
The main advantage of trading using opposite CHINA EDUCATION and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| CHINA EDUCATION vs. CARDINAL HEALTH | CHINA EDUCATION vs. WESANA HEALTH HOLD | CHINA EDUCATION vs. CLOVER HEALTH INV | CHINA EDUCATION vs. MPH Health Care |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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