Correlation Between Hooker Furniture and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Arrow Electronics, you can compare the effects of market volatilities on Hooker Furniture and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Arrow Electronics.
Diversification Opportunities for Hooker Furniture and Arrow Electronics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hooker and Arrow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Arrow Electronics go up and down completely randomly.
Pair Corralation between Hooker Furniture and Arrow Electronics
Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.46 times more return on investment than Arrow Electronics. However, Hooker Furniture is 1.46 times more volatile than Arrow Electronics. It trades about 0.13 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.04 per unit of risk. If you would invest 1,509 in Hooker Furniture on September 2, 2024 and sell it today you would earn a total of 364.00 from holding Hooker Furniture or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Arrow Electronics
Performance |
| Timeline |
| Hooker Furniture |
| Arrow Electronics |
Hooker Furniture and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Arrow Electronics
The main advantage of trading using opposite Hooker Furniture and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Hooker Furniture vs. Willis Lease Finance | Hooker Furniture vs. Rocky Brands | Hooker Furniture vs. First Business Financial |
| Arrow Electronics vs. Avnet Inc | Arrow Electronics vs. Synnex | Arrow Electronics vs. Ingram Micro Holding | Arrow Electronics vs. Insight Enterprises |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |