Correlation Between Hooker Furniture and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Sierra Bancorp 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 Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Sierra Bancorp, you can compare the effects of market volatilities on Hooker Furniture and Sierra Bancorp 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 Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Sierra Bancorp.
Diversification Opportunities for Hooker Furniture and Sierra Bancorp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Sierra is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp 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 Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Sierra Bancorp go up and down completely randomly.
Pair Corralation between Hooker Furniture and Sierra Bancorp
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Sierra Bancorp. In addition to that, Hooker Furniture is 1.17 times more volatile than Sierra Bancorp. It trades about -0.02 of its total potential returns per unit of risk. Sierra Bancorp is currently generating about 0.05 per unit of volatility. If you would invest 1,931 in Sierra Bancorp on November 2, 2024 and sell it today you would earn a total of 1,104 from holding Sierra Bancorp or generate 57.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Sierra Bancorp
Performance |
| Timeline |
| Hooker Furniture |
| Sierra Bancorp |
Hooker Furniture and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Sierra Bancorp
The main advantage of trading using opposite Hooker Furniture and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Sierra Bancorp 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp'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 |
| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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