Correlation Between Hooker Furniture and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Summit Environmental 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 Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Summit Environmental, you can compare the effects of market volatilities on Hooker Furniture and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Summit Environmental.
Diversification Opportunities for Hooker Furniture and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hooker and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Summit Environmental go up and down completely randomly.
Pair Corralation between Hooker Furniture and Summit Environmental
If you would invest 1,582 in Hooker Furniture on August 26, 2024 and sell it today you would earn a total of 285.00 from holding Hooker Furniture or generate 18.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hooker Furniture vs. Summit Environmental
Performance |
Timeline |
Hooker Furniture |
Summit Environmental |
Hooker Furniture and Summit Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hooker Furniture and Summit Environmental
The main advantage of trading using opposite Hooker Furniture and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental's long position.Hooker Furniture vs. Willis Lease Finance | Hooker Furniture vs. Rocky Brands | Hooker Furniture vs. First Business Financial |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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