Correlation Between Haverty Furniture and Group 1
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Group 1 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 Group 1 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 Group 1 Automotive, you can compare the effects of market volatilities on Haverty Furniture and Group 1 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 Group 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Group 1.
Diversification Opportunities for Haverty Furniture and Group 1
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haverty and Group is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Group 1 Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 1 Automotive 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 Group 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 1 Automotive has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Group 1 go up and down completely randomly.
Pair Corralation between Haverty Furniture and Group 1
Considering the 90-day investment horizon Haverty Furniture Companies is expected to under-perform the Group 1. But the stock apears to be less risky and, when comparing its historical volatility, Haverty Furniture Companies is 1.11 times less risky than Group 1. The stock trades about -0.05 of its potential returns per unit of risk. The Group 1 Automotive is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 34,888 in Group 1 Automotive on August 24, 2024 and sell it today you would earn a total of 6,940 from holding Group 1 Automotive or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Group 1 Automotive
Performance |
| Timeline |
| Haverty Furniture |
| Group 1 Automotive |
Haverty Furniture and Group 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Group 1
The main advantage of trading using opposite Haverty Furniture and Group 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Group 1 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 Group 1 will offset losses from the drop in Group 1's long position.| Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures | Haverty Furniture vs. Kirklands | Haverty Furniture vs. Arhaus Inc |
| Group 1 vs. Penske Automotive Group | Group 1 vs. Lithia Motors | Group 1 vs. AutoNation | Group 1 vs. Asbury Automotive Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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