Correlation Between Hooker Furniture and DIH Holdings
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and DIH Holdings 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 DIH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and DIH Holdings US,, you can compare the effects of market volatilities on Hooker Furniture and DIH Holdings 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 DIH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and DIH Holdings.
Diversification Opportunities for Hooker Furniture and DIH Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hooker and DIH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and DIH Holdings go up and down completely randomly.
Pair Corralation between Hooker Furniture and DIH Holdings
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the DIH Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 2.99 times less risky than DIH Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The DIH Holdings US, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 95.00 in DIH Holdings US, on September 15, 2024 and sell it today you would earn a total of 50.00 from holding DIH Holdings US, or generate 52.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. DIH Holdings US,
Performance |
| Timeline |
| Hooker Furniture |
| DIH Holdings US, |
Hooker Furniture and DIH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and DIH Holdings
The main advantage of trading using opposite Hooker Furniture and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, DIH Holdings 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.| Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Hamilton Beach Brands | Hooker Furniture vs. La Z Boy Incorporated | Hooker Furniture vs. MasterBrand |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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