Correlation Between Floor Decor and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Floor Decor 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 Floor Decor and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and Haverty Furniture Companies, you can compare the effects of market volatilities on Floor Decor 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 Floor Decor with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Haverty Furniture.
Diversification Opportunities for Floor Decor and Haverty Furniture
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Floor and Haverty is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Floor Decor 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 Floor Decor Holdings 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 Floor Decor i.e., Floor Decor and Haverty Furniture go up and down completely randomly.
Pair Corralation between Floor Decor and Haverty Furniture
Considering the 90-day investment horizon Floor Decor is expected to generate 182.34 times less return on investment than Haverty Furniture. But when comparing it to its historical volatility, Floor Decor Holdings is 70.53 times less risky than Haverty Furniture. It trades about 0.06 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,636 in Haverty Furniture Companies on August 28, 2024 and sell it today you would lose (225.00) from holding Haverty Furniture Companies or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.69% |
| Values | Daily Returns |
Floor Decor Holdings vs. Haverty Furniture Companies
Performance |
| Timeline |
| Floor Decor Holdings |
| Haverty Furniture |
Floor Decor and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and Haverty Furniture
The main advantage of trading using opposite Floor Decor and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor 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.| Floor Decor vs. Arhaus Inc | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Kirklands | Floor Decor vs. Haverty Furniture Companies |
| Haverty Furniture vs. Arhaus Inc | Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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