Correlation Between Canlan Ice and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Hooker Furniture, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Hooker Furniture.
Diversification Opportunities for Canlan Ice and Hooker Furniture
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canlan and Hooker is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Hooker Furniture go up and down completely randomly.
Pair Corralation between Canlan Ice and Hooker Furniture
Assuming the 90 days horizon Canlan Ice Sports is expected to generate 0.04 times more return on investment than Hooker Furniture. However, Canlan Ice Sports is 26.74 times less risky than Hooker Furniture. It trades about 0.14 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.01 per unit of risk. If you would invest 288.00 in Canlan Ice Sports on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Canlan Ice Sports or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Canlan Ice Sports vs. Hooker Furniture
Performance |
| Timeline |
| Canlan Ice Sports |
| Hooker Furniture |
Canlan Ice and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Hooker Furniture
The main advantage of trading using opposite Canlan Ice and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. Mind Technology | Canlan Ice vs. KVH Industries | Canlan Ice vs. Nextnav Acquisition Corp | Canlan Ice vs. Marfrig Global Foods |
| Hooker Furniture vs. Willis Lease Finance | Hooker Furniture vs. Rocky Brands | Hooker Furniture vs. First Business Financial |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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