Correlation Between Haverty Furniture and Holley
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Holley 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 Holley 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 Holley Inc, you can compare the effects of market volatilities on Haverty Furniture and Holley 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 Holley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Holley.
Diversification Opportunities for Haverty Furniture and Holley
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haverty and Holley is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Holley Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holley 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 Holley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holley Inc has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Holley go up and down completely randomly.
Pair Corralation between Haverty Furniture and Holley
Considering the 90-day investment horizon Haverty Furniture is expected to generate 4.67 times less return on investment than Holley. But when comparing it to its historical volatility, Haverty Furniture Companies is 1.02 times less risky than Holley. It trades about 0.02 of its potential returns per unit of risk. Holley Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 276.00 in Holley Inc on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Holley Inc or generate 4.35% 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. Holley Inc
Performance |
| Timeline |
| Haverty Furniture |
| Holley Inc |
Haverty Furniture and Holley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Holley
The main advantage of trading using opposite Haverty Furniture and Holley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Holley 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 Holley will offset losses from the drop in Holley's long position.| Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures | Haverty Furniture vs. Kirklands | Haverty Furniture vs. Arhaus Inc |
| Holley vs. Dorman Products | Holley vs. Monro Muffler Brake | Holley vs. Standard Motor Products | Holley vs. Stoneridge |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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