Correlation Between Greif and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Greif 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 Greif and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greif Inc and Haverty Furniture Companies, you can compare the effects of market volatilities on Greif 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 Greif with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greif and Haverty Furniture.
Diversification Opportunities for Greif and Haverty Furniture
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greif and Haverty is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Greif Inc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Greif 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 Greif Inc 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 Greif i.e., Greif and Haverty Furniture go up and down completely randomly.
Pair Corralation between Greif and Haverty Furniture
Assuming the 90 days horizon Greif Inc is expected to generate 0.51 times more return on investment than Haverty Furniture. However, Greif Inc is 1.97 times less risky than Haverty Furniture. It trades about 0.28 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.01 per unit of risk. If you would invest 6,756 in Greif Inc on August 31, 2024 and sell it today you would earn a total of 760.00 from holding Greif Inc or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Greif Inc vs. Haverty Furniture Companies
Performance |
| Timeline |
| Greif Inc |
| Haverty Furniture |
Greif and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greif and Haverty Furniture
The main advantage of trading using opposite Greif and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greif 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.| Greif vs. Pactiv Evergreen | Greif vs. Myers Industries | Greif vs. Silgan Holdings | Greif vs. Sonoco Products |
| Haverty Furniture vs. Porsche Automobile Holding | Haverty Furniture vs. Ferrari NV | Haverty Furniture vs. Toyota Motor | Haverty Furniture vs. General Motors |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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