Correlation Between Capital Clean and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Hooker 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 Capital Clean and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Hooker Furniture, you can compare the effects of market volatilities on Capital Clean and Hooker 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 Capital Clean with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Hooker Furniture.
Diversification Opportunities for Capital Clean and Hooker Furniture
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capital and Hooker is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Capital Clean i.e., Capital Clean and Hooker Furniture go up and down completely randomly.
Pair Corralation between Capital Clean and Hooker Furniture
Given the investment horizon of 90 days Capital Clean Energy is expected to generate 0.75 times more return on investment than Hooker Furniture. However, Capital Clean Energy is 1.34 times less risky than Hooker Furniture. It trades about 0.07 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.01 per unit of risk. If you would invest 1,295 in Capital Clean Energy on September 3, 2024 and sell it today you would earn a total of 493.00 from holding Capital Clean Energy or generate 38.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Hooker Furniture
Performance |
| Timeline |
| Capital Clean Energy |
| Hooker Furniture |
Capital Clean and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Hooker Furniture
The main advantage of trading using opposite Capital Clean and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Hooker 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| Capital Clean vs. Electrovaya Common Shares | Capital Clean vs. Zoom Video Communications | Capital Clean vs. Videolocity International | Capital Clean vs. Hurco Companies |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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