Correlation Between China Eastern and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both China Eastern 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 Eastern 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 Eastern Airlines and Haverty Furniture Companies, you can compare the effects of market volatilities on China Eastern 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 Eastern with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Haverty Furniture.
Diversification Opportunities for China Eastern and Haverty Furniture
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Haverty is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines 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 Eastern 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 Eastern Airlines 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 Eastern i.e., China Eastern and Haverty Furniture go up and down completely randomly.
Pair Corralation between China Eastern and Haverty Furniture
Assuming the 90 days trading horizon China Eastern is expected to generate 1.96 times less return on investment than Haverty Furniture. In addition to that, China Eastern is 2.25 times more volatile than Haverty Furniture Companies. It trades about 0.07 of its total potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.33 per unit of volatility. If you would invest 2,040 in Haverty Furniture Companies on October 24, 2024 and sell it today you would earn a total of 160.00 from holding Haverty Furniture Companies or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Eastern Airlines vs. Haverty Furniture Companies
Performance |
| Timeline |
| China Eastern Airlines |
| Haverty Furniture |
China Eastern and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Haverty Furniture
The main advantage of trading using opposite China Eastern and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern 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 Eastern vs. Guangdong Investment Limited | China Eastern vs. JLF INVESTMENT | China Eastern vs. WillScot Mobile Mini | China Eastern vs. Apollo Investment Corp |
| Haverty Furniture vs. Laureate Education | Haverty Furniture vs. UNIVMUSIC GRPADR050 | Haverty Furniture vs. China Eastern Airlines | Haverty Furniture vs. CHINA EDUCATION GROUP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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