Correlation Between Ross Stores and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Haverty 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 Ross Stores and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Haverty Furniture Companies, you can compare the effects of market volatilities on Ross Stores and Haverty 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 Ross Stores with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Haverty Furniture.
Diversification Opportunities for Ross Stores and Haverty Furniture
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ross and Haverty is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Ross Stores 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 Ross Stores are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Ross Stores i.e., Ross Stores and Haverty Furniture go up and down completely randomly.
Pair Corralation between Ross Stores and Haverty Furniture
Given the investment horizon of 90 days Ross Stores is expected to generate 0.61 times more return on investment than Haverty Furniture. However, Ross Stores is 1.64 times less risky than Haverty Furniture. It trades about 0.08 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.04 per unit of risk. If you would invest 13,182 in Ross Stores on September 3, 2024 and sell it today you would earn a total of 2,305 from holding Ross Stores or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Haverty Furniture Companies
Performance |
| Timeline |
| Ross Stores |
| Haverty Furniture |
Ross Stores and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Haverty Furniture
The main advantage of trading using opposite Ross Stores and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Haverty 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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