Correlation Between Lowes Companies and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Lowes Companies and Haverty Furniture 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 Lowes Companies and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Haverty Furniture Companies, you can compare the effects of market volatilities on Lowes Companies and Haverty Furniture 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 Lowes Companies with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Haverty Furniture.
Diversification Opportunities for Lowes Companies and Haverty Furniture
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowes and Haverty is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Lowes Companies 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 Lowes Companies are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Lowes Companies i.e., Lowes Companies and Haverty Furniture go up and down completely randomly.
Pair Corralation between Lowes Companies and Haverty Furniture
Considering the 90-day investment horizon Lowes Companies is expected to generate 166.7 times less return on investment than Haverty Furniture. But when comparing it to its historical volatility, Lowes Companies is 115.69 times less risky than Haverty Furniture. It trades about 0.1 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,457 in Haverty Furniture Companies on August 25, 2024 and sell it today you would lose (230.00) from holding Haverty Furniture Companies or give up 9.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 41.7% |
| Values | Daily Returns |
Lowes Companies vs. Haverty Furniture Companies
Performance |
| Timeline |
| Lowes Companies |
| Haverty Furniture |
Lowes Companies and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Haverty Furniture
The main advantage of trading using opposite Lowes Companies and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Home Depot |
| Haverty Furniture vs. Arhaus Inc | Haverty Furniture vs. Floor Decor Holdings | Haverty Furniture vs. Live Ventures |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |