Correlation Between Hooker Furniture and Natural Alternatives
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Natural Alternatives 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 Natural Alternatives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Natural Alternatives International, you can compare the effects of market volatilities on Hooker Furniture and Natural Alternatives 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 Natural Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Natural Alternatives.
Diversification Opportunities for Hooker Furniture and Natural Alternatives
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hooker and Natural is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives 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 Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Natural Alternatives go up and down completely randomly.
Pair Corralation between Hooker Furniture and Natural Alternatives
Given the investment horizon of 90 days Hooker Furniture is expected to generate 0.73 times more return on investment than Natural Alternatives. However, Hooker Furniture is 1.37 times less risky than Natural Alternatives. It trades about 0.04 of its potential returns per unit of risk. Natural Alternatives International is currently generating about -0.14 per unit of risk. If you would invest 1,808 in Hooker Furniture on August 30, 2024 and sell it today you would earn a total of 55.00 from holding Hooker Furniture or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Hooker Furniture vs. Natural Alternatives Internati
Performance |
| Timeline |
| Hooker Furniture |
| Natural Alternatives |
Hooker Furniture and Natural Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Natural Alternatives
The main advantage of trading using opposite Hooker Furniture and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
| Natural Alternatives vs. ELF Beauty | Natural Alternatives vs. Procter Gamble | Natural Alternatives vs. Colgate Palmolive | Natural Alternatives vs. Kenvue Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |