Correlation Between Hooker Furniture and Ethan Allen
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Ethan Allen 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 Ethan Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Ethan Allen Interiors, you can compare the effects of market volatilities on Hooker Furniture and Ethan Allen 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 Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Ethan Allen.
Diversification Opportunities for Hooker Furniture and Ethan Allen
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Ethan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors 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 Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Ethan Allen go up and down completely randomly.
Pair Corralation between Hooker Furniture and Ethan Allen
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Ethan Allen. In addition to that, Hooker Furniture is 1.3 times more volatile than Ethan Allen Interiors. It trades about -0.03 of its total potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.02 per unit of volatility. If you would invest 2,331 in Ethan Allen Interiors on January 13, 2025 and sell it today you would earn a total of 352.00 from holding Ethan Allen Interiors or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Ethan Allen Interiors
Performance |
| Timeline |
| Hooker Furniture |
| Ethan Allen Interiors |
Hooker Furniture and Ethan Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Ethan Allen
The main advantage of trading using opposite Hooker Furniture and Ethan Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Ethan Allen 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 Ethan Allen will offset losses from the drop in Ethan Allen'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 |
| Ethan Allen vs. Bassett Furniture Industries | Ethan Allen vs. Natuzzi SpA | Ethan Allen vs. Flexsteel Industries | Ethan Allen vs. Hamilton Beach Brands |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |