Correlation Between Hooker Furniture and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and ON Semiconductor 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 ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and ON Semiconductor, you can compare the effects of market volatilities on Hooker Furniture and ON Semiconductor 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 ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and ON Semiconductor.
Diversification Opportunities for Hooker Furniture and ON Semiconductor
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hooker and ON Semiconductor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor 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 ON Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON Semiconductor has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and ON Semiconductor go up and down completely randomly.
Pair Corralation between Hooker Furniture and ON Semiconductor
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the ON Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 1.03 times less risky than ON Semiconductor. The stock trades about -0.02 of its potential returns per unit of risk. The ON Semiconductor is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,940 in ON Semiconductor on September 4, 2024 and sell it today you would lose (959.00) from holding ON Semiconductor or give up 12.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. ON Semiconductor
Performance |
| Timeline |
| Hooker Furniture |
| ON Semiconductor |
Hooker Furniture and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and ON Semiconductor
The main advantage of trading using opposite Hooker Furniture and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, ON Semiconductor 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 ON Semiconductor will offset losses from the drop in ON Semiconductor'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 |
| ON Semiconductor vs. Texas Instruments Incorporated | ON Semiconductor vs. Microchip Technology | ON Semiconductor vs. Analog Devices | ON Semiconductor vs. Qorvo 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stocks Directory Find actively traded stocks across global markets |