Correlation Between Haverty Furniture and Hasbro
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Hasbro 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 Hasbro 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 Hasbro Inc, you can compare the effects of market volatilities on Haverty Furniture and Hasbro 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 Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Hasbro.
Diversification Opportunities for Haverty Furniture and Hasbro
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haverty and Hasbro is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc 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 Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Hasbro go up and down completely randomly.
Pair Corralation between Haverty Furniture and Hasbro
Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 1.32 times more return on investment than Hasbro. However, Haverty Furniture is 1.32 times more volatile than Hasbro Inc. It trades about 0.18 of its potential returns per unit of risk. Hasbro Inc is currently generating about 0.02 per unit of risk. If you would invest 2,186 in Haverty Furniture Companies on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Haverty Furniture Companies or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Hasbro Inc
Performance |
| Timeline |
| Haverty Furniture |
| Hasbro Inc |
Haverty Furniture and Hasbro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Hasbro
The main advantage of trading using opposite Haverty Furniture and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.| Haverty Furniture vs. Purple Innovation | Haverty Furniture vs. Mohawk Industries | Haverty Furniture vs. La Z Boy Incorporated | Haverty Furniture vs. Leggett Platt Incorporated |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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