Correlation Between Haverty Furniture and Kingfisher Plc
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Kingfisher Plc 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 Kingfisher Plc 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 Kingfisher plc, you can compare the effects of market volatilities on Haverty Furniture and Kingfisher Plc 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 Kingfisher Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Kingfisher Plc.
Diversification Opportunities for Haverty Furniture and Kingfisher Plc
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haverty and Kingfisher is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Kingfisher plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfisher plc 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 Kingfisher Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfisher plc has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Kingfisher Plc go up and down completely randomly.
Pair Corralation between Haverty Furniture and Kingfisher Plc
Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 42.66 times more return on investment than Kingfisher Plc. However, Haverty Furniture is 42.66 times more volatile than Kingfisher plc. It trades about 0.15 of its potential returns per unit of risk. Kingfisher plc is currently generating about 0.03 per unit of risk. If you would invest 2,636 in Haverty Furniture Companies on August 25, 2024 and sell it today you would lose (409.00) from holding Haverty Furniture Companies or give up 15.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.69% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Kingfisher plc
Performance |
| Timeline |
| Haverty Furniture |
| Kingfisher plc |
Haverty Furniture and Kingfisher Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Kingfisher Plc
The main advantage of trading using opposite Haverty Furniture and Kingfisher Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Kingfisher Plc 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 Kingfisher Plc will offset losses from the drop in Kingfisher Plc's long position.| Haverty Furniture vs. Arhaus Inc | Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures |
| Kingfisher Plc vs. Lowes Companies | Kingfisher Plc vs. Home Depot | Kingfisher Plc vs. Live Ventures | Kingfisher Plc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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