Correlation Between Rocky Brands and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both Rocky Brands 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 Rocky Brands and Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and Bassett Furniture Industries, you can compare the effects of market volatilities on Rocky Brands 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 Rocky Brands with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and Bassett Furniture.
Diversification Opportunities for Rocky Brands and Bassett Furniture
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rocky and Bassett is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and Rocky Brands 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 Rocky Brands 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 Rocky Brands i.e., Rocky Brands and Bassett Furniture go up and down completely randomly.
Pair Corralation between Rocky Brands and Bassett Furniture
Given the investment horizon of 90 days Rocky Brands is expected to under-perform the Bassett Furniture. In addition to that, Rocky Brands is 3.52 times more volatile than Bassett Furniture Industries. It trades about -0.13 of its total potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.22 per unit of volatility. If you would invest 1,377 in Bassett Furniture Industries on August 26, 2024 and sell it today you would earn a total of 117.00 from holding Bassett Furniture Industries or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocky Brands vs. Bassett Furniture Industries
Performance |
| Timeline |
| Rocky Brands |
| Bassett Furniture |
Rocky Brands and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and Bassett Furniture
The main advantage of trading using opposite Rocky Brands and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands 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.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
| Bassett Furniture vs. Willis Lease Finance | Bassett Furniture vs. Rocky Brands | Bassett Furniture vs. First Business Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |