Correlation Between Hooker Furniture and Old Market
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Old Market 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 Old Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Old Market Capital, you can compare the effects of market volatilities on Hooker Furniture and Old Market 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 Old Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Old Market.
Diversification Opportunities for Hooker Furniture and Old Market
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hooker and Old is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Old Market Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Market Capital 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 Old Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Market Capital has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Old Market go up and down completely randomly.
Pair Corralation between Hooker Furniture and Old Market
Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.05 times less return on investment than Old Market. In addition to that, Hooker Furniture is 1.03 times more volatile than Old Market Capital. It trades about 0.03 of its total potential returns per unit of risk. Old Market Capital is currently generating about 0.03 per unit of volatility. If you would invest 490.00 in Old Market Capital on August 31, 2024 and sell it today you would earn a total of 108.00 from holding Old Market Capital or generate 22.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Old Market Capital
Performance |
| Timeline |
| Hooker Furniture |
| Old Market Capital |
Hooker Furniture and Old Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Old Market
The main advantage of trading using opposite Hooker Furniture and Old Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Old Market 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 Old Market will offset losses from the drop in Old Market'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 |
| Old Market vs. Cabo Drilling Corp | Old Market vs. Sable Offshore Corp | Old Market vs. ServiceNow | Old Market vs. Nabors Industries |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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