Correlation Between Ethan Allen and Aterian
Can any of the company-specific risk be diversified away by investing in both Ethan Allen and Aterian 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 Ethan Allen and Aterian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethan Allen Interiors and Aterian, you can compare the effects of market volatilities on Ethan Allen and Aterian 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 Ethan Allen with a short position of Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethan Allen and Aterian.
Diversification Opportunities for Ethan Allen and Aterian
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ethan and Aterian is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ethan Allen Interiors and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Ethan Allen 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 Ethan Allen Interiors are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Ethan Allen i.e., Ethan Allen and Aterian go up and down completely randomly.
Pair Corralation between Ethan Allen and Aterian
Considering the 90-day investment horizon Ethan Allen Interiors is expected to generate 0.43 times more return on investment than Aterian. However, Ethan Allen Interiors is 2.3 times less risky than Aterian. It trades about 0.36 of its potential returns per unit of risk. Aterian is currently generating about -0.09 per unit of risk. If you would invest 2,777 in Ethan Allen Interiors on September 3, 2024 and sell it today you would earn a total of 296.00 from holding Ethan Allen Interiors or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethan Allen Interiors vs. Aterian
Performance |
| Timeline |
| Ethan Allen Interiors |
| Aterian |
Ethan Allen and Aterian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethan Allen and Aterian
The main advantage of trading using opposite Ethan Allen and Aterian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethan Allen position performs unexpectedly, Aterian 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 Aterian will offset losses from the drop in Aterian's long position.| Ethan Allen vs. Bassett Furniture Industries | Ethan Allen vs. Natuzzi SpA | Ethan Allen vs. Flexsteel Industries | Ethan Allen 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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