Correlation Between Figs and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Figs 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 Figs and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Hooker Furniture, you can compare the effects of market volatilities on Figs 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 Figs with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Hooker Furniture.
Diversification Opportunities for Figs and Hooker Furniture
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Figs and Hooker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Figs 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 Figs Inc 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 Figs i.e., Figs and Hooker Furniture go up and down completely randomly.
Pair Corralation between Figs and Hooker Furniture
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Hooker Furniture. In addition to that, Figs is 2.15 times more volatile than Hooker Furniture. It trades about -0.09 of its total potential returns per unit of risk. Hooker Furniture is currently generating about 0.23 per unit of volatility. If you would invest 1,626 in Hooker Furniture on September 2, 2024 and sell it today you would earn a total of 247.00 from holding Hooker Furniture or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Hooker Furniture
Performance |
| Timeline |
| Figs Inc |
| Hooker Furniture |
Figs and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Hooker Furniture
The main advantage of trading using opposite Figs and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs 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.The idea behind Figs Inc and Hooker Furniture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |