Correlation Between Check Point and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Haverty Furniture Companies, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Haverty Furniture.
Diversification Opportunities for Check Point and Haverty Furniture
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and Haverty is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Haverty Furniture go up and down completely randomly.
Pair Corralation between Check Point and Haverty Furniture
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.58 times more return on investment than Haverty Furniture. However, Check Point Software is 1.73 times less risky than Haverty Furniture. It trades about 0.33 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.1 per unit of risk. If you would invest 16,445 in Check Point Software on September 19, 2024 and sell it today you would earn a total of 1,570 from holding Check Point Software or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Check Point Software vs. Haverty Furniture Companies
Performance |
| Timeline |
| Check Point Software |
| Haverty Furniture |
Check Point and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Haverty Furniture
The main advantage of trading using opposite Check Point and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Meiko Electronics Co | Check Point vs. METHODE ELECTRONICS | Check Point vs. MCEWEN MINING INC | Check Point vs. Jacquet Metal Service |
| Haverty Furniture vs. SK TELECOM TDADR | Haverty Furniture vs. Singapore Telecommunications Limited | Haverty Furniture vs. Cogent Communications Holdings | Haverty Furniture vs. Charter Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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