Correlation Between China Teletech and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both China Teletech 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 China Teletech and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Teletech Holding and Hooker Furniture, you can compare the effects of market volatilities on China Teletech 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 China Teletech with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Teletech and Hooker Furniture.
Diversification Opportunities for China Teletech and Hooker Furniture
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Hooker is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Teletech Holding and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and China Teletech 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 Teletech Holding 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 China Teletech i.e., China Teletech and Hooker Furniture go up and down completely randomly.
Pair Corralation between China Teletech and Hooker Furniture
Given the investment horizon of 90 days China Teletech Holding is expected to generate 12.31 times more return on investment than Hooker Furniture. However, China Teletech is 12.31 times more volatile than Hooker Furniture. It trades about 0.05 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.2 per unit of risk. If you would invest 0.22 in China Teletech Holding on September 3, 2024 and sell it today you would lose (0.13) from holding China Teletech Holding or give up 59.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Teletech Holding vs. Hooker Furniture
Performance |
| Timeline |
| China Teletech Holding |
| Hooker Furniture |
China Teletech and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Teletech and Hooker Furniture
The main advantage of trading using opposite China Teletech and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Teletech 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.| China Teletech vs. Oncologix Tech | China Teletech vs. Aqua Power Systems | China Teletech vs. TransAKT | China Teletech vs. China Health Management |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |