Correlation Between Hooker Furniture and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Tianjin Capital 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 Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Tianjin Capital Environmental, you can compare the effects of market volatilities on Hooker Furniture and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Tianjin Capital.
Diversification Opportunities for Hooker Furniture and Tianjin Capital
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hooker and Tianjin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Tianjin Capital go up and down completely randomly.
Pair Corralation between Hooker Furniture and Tianjin Capital
Given the investment horizon of 90 days Hooker Furniture is expected to generate 6.89 times less return on investment than Tianjin Capital. But when comparing it to its historical volatility, Hooker Furniture is 2.27 times less risky than Tianjin Capital. It trades about 0.02 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8.09 in Tianjin Capital Environmental on August 30, 2024 and sell it today you would earn a total of 29.91 from holding Tianjin Capital Environmental or generate 369.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hooker Furniture vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Hooker Furniture |
| Tianjin Capital Envi |
Hooker Furniture and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hooker Furniture and Tianjin Capital
The main advantage of trading using opposite Hooker Furniture and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.| Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands | Hooker Furniture vs. La Z Boy Incorporated |
| Tianjin Capital vs. JJill Inc | Tianjin Capital vs. Duluth Holdings | Tianjin Capital vs. Under Armour C | Tianjin Capital vs. Nike 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |