Correlation Between Haverty Furniture and Shoe Carnival
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival, you can compare the effects of market volatilities on Haverty Furniture and Shoe Carnival 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 Shoe Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Shoe Carnival.
Diversification Opportunities for Haverty Furniture and Shoe Carnival
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haverty and Shoe is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Shoe Carnival go up and down completely randomly.
Pair Corralation between Haverty Furniture and Shoe Carnival
Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 1.09 times more return on investment than Shoe Carnival. However, Haverty Furniture is 1.09 times more volatile than Shoe Carnival. It trades about 0.04 of its potential returns per unit of risk. Shoe Carnival is currently generating about -0.08 per unit of risk. If you would invest 2,363 in Haverty Furniture Companies on August 31, 2024 and sell it today you would earn a total of 43.00 from holding Haverty Furniture Companies or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Shoe Carnival
Performance |
| Timeline |
| Haverty Furniture |
| Shoe Carnival |
Haverty Furniture and Shoe Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Shoe Carnival
The main advantage of trading using opposite Haverty Furniture and Shoe Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Shoe Carnival 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 Shoe Carnival will offset losses from the drop in Shoe Carnival's long position.| Haverty Furniture vs. RLJ Lodging Trust | Haverty Furniture vs. Aquagold International | Haverty Furniture vs. Stepstone Group | Haverty Furniture vs. Morningstar Unconstrained Allocation |
| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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