Correlation Between Hooker Furniture and Regency Centers
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Regency Centers 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 Regency Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Regency Centers, you can compare the effects of market volatilities on Hooker Furniture and Regency Centers 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 Regency Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Regency Centers.
Diversification Opportunities for Hooker Furniture and Regency Centers
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Regency is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Regency Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Centers 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 Regency Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Centers has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Regency Centers go up and down completely randomly.
Pair Corralation between Hooker Furniture and Regency Centers
Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Regency Centers. In addition to that, Hooker Furniture is 1.71 times more volatile than Regency Centers. It trades about -0.08 of its total potential returns per unit of risk. Regency Centers is currently generating about 0.01 per unit of volatility. If you would invest 2,378 in Regency Centers on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Regency Centers or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hooker Furniture vs. Regency Centers
Performance |
| Timeline |
| Hooker Furniture |
| Regency Centers |
Hooker Furniture and Regency Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Regency Centers
The main advantage of trading using opposite Hooker Furniture and Regency Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Regency Centers 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 Regency Centers will offset losses from the drop in Regency Centers' long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
| Regency Centers vs. Dennys Corp | Regency Centers vs. The Cheesecake Factory | Regency Centers vs. Yum Brands | Regency Centers vs. Cheche Group Class |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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