Correlation Between Rocky Brands and Flexsteel Industries
Can any of the company-specific risk be diversified away by investing in both Rocky Brands and Flexsteel 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 Rocky Brands and Flexsteel Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and Flexsteel Industries, you can compare the effects of market volatilities on Rocky Brands and Flexsteel 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 Rocky Brands with a short position of Flexsteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and Flexsteel Industries.
Diversification Opportunities for Rocky Brands and Flexsteel Industries
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rocky and Flexsteel is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Flexsteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexsteel Industries 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 Flexsteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexsteel Industries has no effect on the direction of Rocky Brands i.e., Rocky Brands and Flexsteel Industries go up and down completely randomly.
Pair Corralation between Rocky Brands and Flexsteel Industries
Given the investment horizon of 90 days Rocky Brands is expected to under-perform the Flexsteel Industries. In addition to that, Rocky Brands is 2.69 times more volatile than Flexsteel Industries. It trades about -0.13 of its total potential returns per unit of risk. Flexsteel Industries is currently generating about 0.1 per unit of volatility. If you would invest 5,700 in Flexsteel Industries on August 26, 2024 and sell it today you would earn a total of 271.00 from holding Flexsteel Industries or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocky Brands vs. Flexsteel Industries
Performance |
| Timeline |
| Rocky Brands |
| Flexsteel Industries |
Rocky Brands and Flexsteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and Flexsteel Industries
The main advantage of trading using opposite Rocky Brands and Flexsteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands position performs unexpectedly, Flexsteel 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 Flexsteel Industries will offset losses from the drop in Flexsteel Industries' long position.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
| Flexsteel Industries vs. Hooker Furniture | Flexsteel Industries vs. Bassett Furniture Industries | Flexsteel Industries vs. Willis Lease Finance | Flexsteel Industries vs. Rocky 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |