Correlation Between Hooker Furniture and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Dalata Hotel 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 Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Dalata Hotel Group, you can compare the effects of market volatilities on Hooker Furniture and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Dalata Hotel.
Diversification Opportunities for Hooker Furniture and Dalata Hotel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Dalata is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Dalata Hotel go up and down completely randomly.
Pair Corralation between Hooker Furniture and Dalata Hotel
If you would invest 1,605 in Hooker Furniture on August 28, 2024 and sell it today you would earn a total of 306.00 from holding Hooker Furniture or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hooker Furniture vs. Dalata Hotel Group
Performance |
| Timeline |
| Hooker Furniture |
| Dalata Hotel Group |
Hooker Furniture and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Dalata Hotel
The main advantage of trading using opposite Hooker Furniture and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Hooker Furniture vs. Willis Lease Finance | Hooker Furniture vs. Rocky Brands | Hooker Furniture vs. First Business Financial |
| Dalata Hotel vs. Copa Holdings SA | Dalata Hotel vs. United Airlines Holdings | Dalata Hotel vs. Delta Air Lines | Dalata Hotel vs. SkyWest |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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