Correlation Between Hooker Furniture and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Sensient Technologies 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 Sensient Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Sensient Technologies, you can compare the effects of market volatilities on Hooker Furniture and Sensient Technologies 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 Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Sensient Technologies.
Diversification Opportunities for Hooker Furniture and Sensient Technologies
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hooker and Sensient is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies 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 Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Sensient Technologies go up and down completely randomly.
Pair Corralation between Hooker Furniture and Sensient Technologies
Given the investment horizon of 90 days Hooker Furniture is expected to generate 2.07 times more return on investment than Sensient Technologies. However, Hooker Furniture is 2.07 times more volatile than Sensient Technologies. It trades about 0.04 of its potential returns per unit of risk. Sensient Technologies is currently generating about 0.02 per unit of risk. If you would invest 1,695 in Hooker Furniture on September 3, 2024 and sell it today you would earn a total of 178.00 from holding Hooker Furniture or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Sensient Technologies
Performance |
| Timeline |
| Hooker Furniture |
| Sensient Technologies |
Hooker Furniture and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Sensient Technologies
The main advantage of trading using opposite Hooker Furniture and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Sensient Technologies 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
| Sensient Technologies vs. SPACE | Sensient Technologies vs. Bayview Acquisition Corp | Sensient Technologies vs. T Rowe Price | Sensient Technologies vs. Ampleforth |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |