Correlation Between Hooker Furniture and China Teletech
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and China Teletech 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 China Teletech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and China Teletech Holding, you can compare the effects of market volatilities on Hooker Furniture and China Teletech 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 China Teletech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and China Teletech.
Diversification Opportunities for Hooker Furniture and China Teletech
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hooker and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and China Teletech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Teletech Holding 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 China Teletech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Teletech Holding has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and China Teletech go up and down completely randomly.
Pair Corralation between Hooker Furniture and China Teletech
Given the investment horizon of 90 days Hooker Furniture is expected to generate 3.18 times less return on investment than China Teletech. But when comparing it to its historical volatility, Hooker Furniture is 12.31 times less risky than China Teletech. It trades about 0.2 of its potential returns per unit of risk. China Teletech Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.22 in China Teletech Holding on September 3, 2024 and sell it today you would lose (0.13) from holding China Teletech Holding or give up 59.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. China Teletech Holding
Performance |
| Timeline |
| Hooker Furniture |
| China Teletech Holding |
Hooker Furniture and China Teletech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and China Teletech
The main advantage of trading using opposite Hooker Furniture and China Teletech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, China Teletech 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 China Teletech will offset losses from the drop in China Teletech'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 |
| China Teletech vs. Oncologix Tech | China Teletech vs. Aqua Power Systems | China Teletech vs. TransAKT | China Teletech vs. China Health Management |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |