Correlation Between Grocery Outlet and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Hooker Furniture, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Hooker Furniture.
Diversification Opportunities for Grocery Outlet and Hooker Furniture
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grocery and Hooker is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and Hooker Furniture go up and down completely randomly.
Pair Corralation between Grocery Outlet and Hooker Furniture
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Hooker Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.09 times less risky than Hooker Furniture. The stock trades about -0.02 of its potential returns per unit of risk. The Hooker Furniture is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Hooker Furniture on August 31, 2024 and sell it today you would earn a total of 440.00 from holding Hooker Furniture or generate 30.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Hooker Furniture
Performance |
| Timeline |
| Grocery Outlet Holding |
| Hooker Furniture |
Grocery Outlet and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Hooker Furniture
The main advantage of trading using opposite Grocery Outlet and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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