Correlation Between Natuzzi SpA and Mohawk Industries
Can any of the company-specific risk be diversified away by investing in both Natuzzi SpA and Mohawk Industries 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 Natuzzi SpA and Mohawk Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natuzzi SpA and Mohawk Industries, you can compare the effects of market volatilities on Natuzzi SpA and Mohawk Industries 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 Natuzzi SpA with a short position of Mohawk Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natuzzi SpA and Mohawk Industries.
Diversification Opportunities for Natuzzi SpA and Mohawk Industries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natuzzi and Mohawk is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Natuzzi SpA and Mohawk Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohawk Industries and Natuzzi SpA 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 Natuzzi SpA are associated (or correlated) with Mohawk Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohawk Industries has no effect on the direction of Natuzzi SpA i.e., Natuzzi SpA and Mohawk Industries go up and down completely randomly.
Pair Corralation between Natuzzi SpA and Mohawk Industries
Considering the 90-day investment horizon Natuzzi SpA is expected to generate 2.61 times less return on investment than Mohawk Industries. In addition to that, Natuzzi SpA is 1.52 times more volatile than Mohawk Industries. It trades about 0.06 of its total potential returns per unit of risk. Mohawk Industries is currently generating about 0.24 per unit of volatility. If you would invest 13,171 in Mohawk Industries on August 28, 2024 and sell it today you would earn a total of 1,332 from holding Mohawk Industries or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Natuzzi SpA vs. Mohawk Industries
Performance |
| Timeline |
| Natuzzi SpA |
| Mohawk Industries |
Natuzzi SpA and Mohawk Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natuzzi SpA and Mohawk Industries
The main advantage of trading using opposite Natuzzi SpA and Mohawk Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natuzzi SpA position performs unexpectedly, Mohawk Industries 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 Mohawk Industries will offset losses from the drop in Mohawk Industries' long position.| Natuzzi SpA vs. Bassett Furniture Industries | Natuzzi SpA vs. Hooker Furniture | Natuzzi SpA vs. Flexsteel Industries | Natuzzi SpA vs. Ethan Allen Interiors |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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