Correlation Between PacifiCorp and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both PacifiCorp 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 PacifiCorp and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacifiCorp and Hooker Furniture, you can compare the effects of market volatilities on PacifiCorp 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 PacifiCorp with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacifiCorp and Hooker Furniture.
Diversification Opportunities for PacifiCorp and Hooker Furniture
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PacifiCorp and Hooker is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PacifiCorp and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and PacifiCorp 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 PacifiCorp 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 PacifiCorp i.e., PacifiCorp and Hooker Furniture go up and down completely randomly.
Pair Corralation between PacifiCorp and Hooker Furniture
Assuming the 90 days horizon PacifiCorp is expected to generate 1.16 times more return on investment than Hooker Furniture. However, PacifiCorp is 1.16 times more volatile than Hooker Furniture. It trades about 0.14 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.01 per unit of risk. If you would invest 11,475 in PacifiCorp on September 14, 2024 and sell it today you would earn a total of 1,129 from holding PacifiCorp or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PacifiCorp vs. Hooker Furniture
Performance |
| Timeline |
| PacifiCorp |
| Hooker Furniture |
PacifiCorp and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacifiCorp and Hooker Furniture
The main advantage of trading using opposite PacifiCorp and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacifiCorp 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.| PacifiCorp vs. Analog Devices | PacifiCorp vs. Four Seasons Education | PacifiCorp vs. AMREP | PacifiCorp vs. Relx PLC ADR |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |