Correlation Between 98877DAC9 and Hooker Furniture

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Can any of the company-specific risk be diversified away by investing in both 98877DAC9 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 98877DAC9 and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZF North America and Hooker Furniture, you can compare the effects of market volatilities on 98877DAC9 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 98877DAC9 with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of 98877DAC9 and Hooker Furniture.

Diversification Opportunities for 98877DAC9 and Hooker Furniture

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between 98877DAC9 and Hooker is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ZF North America and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and 98877DAC9 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 ZF North America 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 98877DAC9 i.e., 98877DAC9 and Hooker Furniture go up and down completely randomly.

Pair Corralation between 98877DAC9 and Hooker Furniture

Assuming the 90 days trading horizon ZF North America is expected to under-perform the Hooker Furniture. But the bond apears to be less risky and, when comparing its historical volatility, ZF North America is 1.97 times less risky than Hooker Furniture. The bond trades about -0.09 of its potential returns per unit of risk. The Hooker Furniture is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,763  in Hooker Furniture on September 6, 2024 and sell it today you would earn a total of  29.00  from holding Hooker Furniture or generate 1.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy59.09%
ValuesDaily Returns

ZF North America  vs.  Hooker Furniture

 Performance 
       Timeline  
ZF North America 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ZF North America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 98877DAC9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Hooker Furniture 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Hooker Furniture unveiled solid returns over the last few months and may actually be approaching a breakup point.

98877DAC9 and Hooker Furniture Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 98877DAC9 and Hooker Furniture

The main advantage of trading using opposite 98877DAC9 and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 98877DAC9 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.
The idea behind ZF North America and Hooker Furniture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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