Correlation Between Hooker Furniture and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Ameriprise Financial 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 Hooker Furniture and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Ameriprise Financial, you can compare the effects of market volatilities on Hooker Furniture and Ameriprise Financial 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 Hooker Furniture with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Ameriprise Financial.
Diversification Opportunities for Hooker Furniture and Ameriprise Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Ameriprise is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Hooker Furniture 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 Hooker Furniture are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Hooker Furniture and Ameriprise Financial
Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.45 times more return on investment than Ameriprise Financial. However, Hooker Furniture is 1.45 times more volatile than Ameriprise Financial. It trades about -0.03 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.26 per unit of risk. If you would invest 1,327 in Hooker Furniture on November 29, 2024 and sell it today you would lose (26.00) from holding Hooker Furniture or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Ameriprise Financial
Performance |
| Timeline |
| Hooker Furniture |
| Ameriprise Financial |
Hooker Furniture and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Ameriprise Financial
The main advantage of trading using opposite Hooker Furniture and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
| Ameriprise Financial vs. State Street Corp | Ameriprise Financial vs. Bank of New | Ameriprise Financial vs. SEI Investments | Ameriprise Financial vs. Principal Financial Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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