Correlation Between Hooker Furniture and Orbit Drop
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Orbit Drop 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 Orbit Drop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Orbit Drop, you can compare the effects of market volatilities on Hooker Furniture and Orbit Drop 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 Orbit Drop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Orbit Drop.
Diversification Opportunities for Hooker Furniture and Orbit Drop
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hooker and Orbit is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Orbit Drop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Drop 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 Orbit Drop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Drop has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Orbit Drop go up and down completely randomly.
Pair Corralation between Hooker Furniture and Orbit Drop
Given the investment horizon of 90 days Hooker Furniture is expected to generate 399.92 times less return on investment than Orbit Drop. But when comparing it to its historical volatility, Hooker Furniture is 60.89 times less risky than Orbit Drop. It trades about 0.02 of its potential returns per unit of risk. Orbit Drop is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Orbit Drop on September 5, 2024 and sell it today you would earn a total of 0.01 from holding Orbit Drop or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 15.56% |
| Values | Daily Returns |
Hooker Furniture vs. Orbit Drop
Performance |
| Timeline |
| Hooker Furniture |
| Orbit Drop |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hooker Furniture and Orbit Drop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Orbit Drop
The main advantage of trading using opposite Hooker Furniture and Orbit Drop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Orbit Drop 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 Orbit Drop will offset losses from the drop in Orbit Drop'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 |
| Orbit Drop vs. Universal Music Group | Orbit Drop vs. Western Acquisition Ventures | Orbit Drop vs. Compania Cervecerias Unidas | Orbit Drop vs. Fomento Economico Mexicano |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |