Correlation Between Flexsteel Industries and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Flexsteel Industries 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 Flexsteel Industries and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexsteel Industries and Haverty Furniture Companies, you can compare the effects of market volatilities on Flexsteel Industries 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 Flexsteel Industries with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexsteel Industries and Haverty Furniture.
Diversification Opportunities for Flexsteel Industries and Haverty Furniture
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flexsteel and Haverty is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Flexsteel Industries and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Flexsteel Industries 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 Flexsteel Industries 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 Flexsteel Industries i.e., Flexsteel Industries and Haverty Furniture go up and down completely randomly.
Pair Corralation between Flexsteel Industries and Haverty Furniture
Given the investment horizon of 90 days Flexsteel Industries is expected to generate 1.56 times more return on investment than Haverty Furniture. However, Flexsteel Industries is 1.56 times more volatile than Haverty Furniture Companies. It trades about 0.1 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.0 per unit of risk. If you would invest 1,424 in Flexsteel Industries on August 28, 2024 and sell it today you would earn a total of 4,513 from holding Flexsteel Industries or generate 316.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexsteel Industries vs. Haverty Furniture Companies
Performance |
| Timeline |
| Flexsteel Industries |
| Haverty Furniture |
Flexsteel Industries and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexsteel Industries and Haverty Furniture
The main advantage of trading using opposite Flexsteel Industries and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexsteel Industries 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.| Flexsteel Industries vs. Willis Lease Finance | Flexsteel Industries vs. Rocky Brands | Flexsteel Industries vs. First Business Financial |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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