Correlation Between Procter Gamble and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Hooker 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 Procter Gamble and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Hooker Furniture, you can compare the effects of market volatilities on Procter Gamble and Hooker 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 Procter Gamble with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Hooker Furniture.
Diversification Opportunities for Procter Gamble and Hooker Furniture
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Hooker is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Procter Gamble 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 Procter Gamble are associated (or correlated) with Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Procter Gamble i.e., Procter Gamble and Hooker Furniture go up and down completely randomly.
Pair Corralation between Procter Gamble and Hooker Furniture
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 3.87 times less return on investment than Hooker Furniture. But when comparing it to its historical volatility, Procter Gamble is 2.8 times less risky than Hooker Furniture. It trades about 0.19 of its potential returns per unit of risk. Hooker Furniture is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,605 in Hooker Furniture on August 28, 2024 and sell it today you would earn a total of 306.00 from holding Hooker Furniture or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Hooker Furniture
Performance |
| Timeline |
| Procter Gamble |
| Hooker Furniture |
Procter Gamble and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Hooker Furniture
The main advantage of trading using opposite Procter Gamble and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Hooker 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| Procter Gamble vs. Unilever PLC ADR | Procter Gamble vs. Estee Lauder Companies | Procter Gamble vs. ELF Beauty | Procter Gamble vs. Coty Inc |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |