Correlation Between Tefron and Hovnanian Enterprises
Can any of the company-specific risk be diversified away by investing in both Tefron and Hovnanian Enterprises 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 Tefron and Hovnanian Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tefron and Hovnanian Enterprises PFD, you can compare the effects of market volatilities on Tefron and Hovnanian Enterprises 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 Tefron with a short position of Hovnanian Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tefron and Hovnanian Enterprises.
Diversification Opportunities for Tefron and Hovnanian Enterprises
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tefron and Hovnanian is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tefron and Hovnanian Enterprises PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hovnanian Enterprises PFD and Tefron 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 Tefron are associated (or correlated) with Hovnanian Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hovnanian Enterprises PFD has no effect on the direction of Tefron i.e., Tefron and Hovnanian Enterprises go up and down completely randomly.
Pair Corralation between Tefron and Hovnanian Enterprises
If you would invest 1,630 in Hovnanian Enterprises PFD on August 31, 2024 and sell it today you would earn a total of 136.00 from holding Hovnanian Enterprises PFD or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.85% |
| Values | Daily Returns |
Tefron vs. Hovnanian Enterprises PFD
Performance |
| Timeline |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hovnanian Enterprises PFD |
Tefron and Hovnanian Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tefron and Hovnanian Enterprises
The main advantage of trading using opposite Tefron and Hovnanian Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tefron position performs unexpectedly, Hovnanian Enterprises 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 Hovnanian Enterprises will offset losses from the drop in Hovnanian Enterprises' long position.| Tefron vs. LB Foster | Tefron vs. Inflection Point Acquisition | Tefron vs. SunLink Health Systems | Tefron vs. Cedar Realty Trust |
| Hovnanian Enterprises vs. Beazer Homes USA | Hovnanian Enterprises vs. KB Home | Hovnanian Enterprises vs. MI Homes | Hovnanian Enterprises vs. Taylor Morn Home |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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