Correlation Between Haverty Furniture and Floor Decor
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Floor Decor 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 Haverty Furniture and Floor Decor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haverty Furniture Companies and Floor Decor Holdings, you can compare the effects of market volatilities on Haverty Furniture and Floor Decor 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 Haverty Furniture with a short position of Floor Decor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Floor Decor.
Diversification Opportunities for Haverty Furniture and Floor Decor
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haverty and Floor is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Floor Decor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floor Decor Holdings and Haverty 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 Haverty Furniture Companies are associated (or correlated) with Floor Decor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floor Decor Holdings has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Floor Decor go up and down completely randomly.
Pair Corralation between Haverty Furniture and Floor Decor
Assuming the 90 days horizon Haverty Furniture Companies is expected to under-perform the Floor Decor. In addition to that, Haverty Furniture is 1.1 times more volatile than Floor Decor Holdings. It trades about -0.02 of its total potential returns per unit of risk. Floor Decor Holdings is currently generating about 0.18 per unit of volatility. If you would invest 10,184 in Floor Decor Holdings on August 28, 2024 and sell it today you would earn a total of 1,291 from holding Floor Decor Holdings or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Floor Decor Holdings
Performance |
| Timeline |
| Haverty Furniture |
| Floor Decor Holdings |
Haverty Furniture and Floor Decor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Floor Decor
The main advantage of trading using opposite Haverty Furniture and Floor Decor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Floor Decor 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 Floor Decor will offset losses from the drop in Floor Decor's long position.| Haverty Furniture vs. Arhaus Inc | Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures |
| Floor Decor vs. Arhaus Inc | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Kirklands | Floor Decor vs. Haverty Furniture Companies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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