Correlation Between Haverty Furniture and Marriott Vacations
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Marriott Vacations 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 Haverty Furniture and Marriott Vacations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haverty Furniture Companies and Marriott Vacations Worldwide, you can compare the effects of market volatilities on Haverty Furniture and Marriott Vacations 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 Haverty Furniture with a short position of Marriott Vacations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Marriott Vacations.
Diversification Opportunities for Haverty Furniture and Marriott Vacations
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haverty and Marriott is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Marriott Vacations Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott Vacations and Haverty Furniture 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 Haverty Furniture Companies are associated (or correlated) with Marriott Vacations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott Vacations has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Marriott Vacations go up and down completely randomly.
Pair Corralation between Haverty Furniture and Marriott Vacations
Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 1.06 times more return on investment than Marriott Vacations. However, Haverty Furniture is 1.06 times more volatile than Marriott Vacations Worldwide. It trades about -0.01 of its potential returns per unit of risk. Marriott Vacations Worldwide is currently generating about -0.21 per unit of risk. If you would invest 2,010 in Haverty Furniture Companies on December 21, 2024 and sell it today you would lose (80.00) from holding Haverty Furniture Companies or give up 3.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Haverty Furniture Companies vs. Marriott Vacations Worldwide
Performance |
Timeline |
Haverty Furniture |
Marriott Vacations |
Haverty Furniture and Marriott Vacations Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Haverty Furniture and Marriott Vacations
The main advantage of trading using opposite Haverty Furniture and Marriott Vacations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, Marriott Vacations 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 Marriott Vacations will offset losses from the drop in Marriott Vacations' long position.Haverty Furniture vs. Transport International Holdings | Haverty Furniture vs. SPORTING | Haverty Furniture vs. NTG Nordic Transport | Haverty Furniture vs. KENEDIX OFFICE INV |
Marriott Vacations vs. SERI INDUSTRIAL EO | Marriott Vacations vs. Zijin Mining Group | Marriott Vacations vs. Jacquet Metal Service | Marriott Vacations vs. GRIFFIN MINING LTD |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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