Correlation Between Mohawk Industries and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both Mohawk Industries and Bassett 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 Mohawk Industries and Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohawk Industries and Bassett Furniture Industries, you can compare the effects of market volatilities on Mohawk Industries and Bassett 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 Mohawk Industries with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohawk Industries and Bassett Furniture.
Diversification Opportunities for Mohawk Industries and Bassett Furniture
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mohawk and Bassett is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Industries and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and Mohawk Industries 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 Mohawk Industries are associated (or correlated) with Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Mohawk Industries i.e., Mohawk Industries and Bassett Furniture go up and down completely randomly.
Pair Corralation between Mohawk Industries and Bassett Furniture
Considering the 90-day investment horizon Mohawk Industries is expected to generate 1.23 times more return on investment than Bassett Furniture. However, Mohawk Industries is 1.23 times more volatile than Bassett Furniture Industries. It trades about 0.04 of its potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.0 per unit of risk. If you would invest 9,809 in Mohawk Industries on August 24, 2024 and sell it today you would earn a total of 4,068 from holding Mohawk Industries or generate 41.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mohawk Industries vs. Bassett Furniture Industries
Performance |
| Timeline |
| Mohawk Industries |
| Bassett Furniture |
Mohawk Industries and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohawk Industries and Bassett Furniture
The main advantage of trading using opposite Mohawk Industries and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohawk Industries position performs unexpectedly, Bassett 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 Bassett Furniture will offset losses from the drop in Bassett Furniture's long position.| Mohawk Industries vs. Bassett Furniture Industries | Mohawk Industries vs. Ethan Allen Interiors | Mohawk Industries vs. Natuzzi SpA | Mohawk Industries vs. Flexsteel Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |