Correlation Between Haverty Furniture and Wesfarmers
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Wesfarmers 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 Wesfarmers 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 Wesfarmers Ltd ADR, you can compare the effects of market volatilities on Haverty Furniture and Wesfarmers 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 Wesfarmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Wesfarmers.
Diversification Opportunities for Haverty Furniture and Wesfarmers
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haverty and Wesfarmers is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Wesfarmers Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesfarmers ADR 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 Wesfarmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesfarmers ADR has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Wesfarmers go up and down completely randomly.
Pair Corralation between Haverty Furniture and Wesfarmers
Considering the 90-day investment horizon Haverty Furniture Companies is expected to under-perform the Wesfarmers. In addition to that, Haverty Furniture is 1.09 times more volatile than Wesfarmers Ltd ADR. It trades about -0.02 of its total potential returns per unit of risk. Wesfarmers Ltd ADR is currently generating about 0.01 per unit of volatility. If you would invest 2,275 in Wesfarmers Ltd ADR on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Wesfarmers Ltd ADR or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Wesfarmers Ltd ADR
Performance |
| Timeline |
| Haverty Furniture |
| Wesfarmers ADR |
Haverty Furniture and Wesfarmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Wesfarmers
The main advantage of trading using opposite Haverty Furniture and Wesfarmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Wesfarmers 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 Wesfarmers will offset losses from the drop in Wesfarmers' long position.| Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures | Haverty Furniture vs. Kirklands | Haverty Furniture vs. Arhaus Inc |
| Wesfarmers vs. Haverty Furniture Companies | Wesfarmers vs. Arhaus Inc | Wesfarmers vs. Home Depot | Wesfarmers vs. Lowes 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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