Correlation Between Hooker Furniture and Figs
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Figs 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 Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Figs Inc, you can compare the effects of market volatilities on Hooker Furniture and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Figs.
Diversification Opportunities for Hooker Furniture and Figs
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hooker and Figs is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Figs go up and down completely randomly.
Pair Corralation between Hooker Furniture and Figs
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Figs. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 1.43 times less risky than Figs. The stock trades about -0.01 of its potential returns per unit of risk. The Figs Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Figs Inc on September 4, 2024 and sell it today you would lose (159.00) from holding Figs Inc or give up 22.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Figs Inc
Performance |
| Timeline |
| Hooker Furniture |
| Figs Inc |
Hooker Furniture and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Figs
The main advantage of trading using opposite Hooker Furniture and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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