Correlation Between Hooker Furniture and BW Offshore

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and BW Offshore 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 BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and BW Offshore Limited, you can compare the effects of market volatilities on Hooker Furniture and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and BW Offshore.

Diversification Opportunities for Hooker Furniture and BW Offshore

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Hooker and BWOFY is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and BW Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore Limited 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore Limited has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and BW Offshore go up and down completely randomly.

Pair Corralation between Hooker Furniture and BW Offshore

Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the BW Offshore. In addition to that, Hooker Furniture is 2.14 times more volatile than BW Offshore Limited. It trades about 0.0 of its total potential returns per unit of risk. BW Offshore Limited is currently generating about 0.07 per unit of volatility. If you would invest  412.00  in BW Offshore Limited on September 12, 2024 and sell it today you would earn a total of  143.00  from holding BW Offshore Limited or generate 34.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.72%
ValuesDaily Returns

Hooker Furniture  vs.  BW Offshore Limited

 Performance 
       Timeline  
Hooker Furniture 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Hooker Furniture may actually be approaching a critical reversion point that can send shares even higher in January 2025.
BW Offshore Limited 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in BW Offshore Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, BW Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Hooker Furniture and BW Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hooker Furniture and BW Offshore

The main advantage of trading using opposite Hooker Furniture and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.
The idea behind Hooker Furniture and BW Offshore Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios