Correlation Between Hooker Furniture and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Capital Clean 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 Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Capital Clean Energy, you can compare the effects of market volatilities on Hooker Furniture and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Capital Clean.
Diversification Opportunities for Hooker Furniture and Capital Clean
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hooker and Capital is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Capital Clean go up and down completely randomly.
Pair Corralation between Hooker Furniture and Capital Clean
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Capital Clean. In addition to that, Hooker Furniture is 1.78 times more volatile than Capital Clean Energy. It trades about -0.27 of its total potential returns per unit of risk. Capital Clean Energy is currently generating about -0.05 per unit of volatility. If you would invest 1,880 in Capital Clean Energy on October 26, 2024 and sell it today you would lose (66.00) from holding Capital Clean Energy or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Capital Clean Energy
Performance |
| Timeline |
| Hooker Furniture |
| Capital Clean Energy |
Hooker Furniture and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Capital Clean
The main advantage of trading using opposite Hooker Furniture and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean'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 |
| Capital Clean vs. Lipocine | Capital Clean vs. Flutter Entertainment plc | Capital Clean vs. Cirmaker Technology | Capital Clean vs. Ubisoft Entertainment |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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