Correlation Between Chewy and Haverty Furniture

Can any of the company-specific risk be diversified away by investing in both Chewy 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 Chewy and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chewy Inc and Haverty Furniture Companies, you can compare the effects of market volatilities on Chewy 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 Chewy with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chewy and Haverty Furniture.

Diversification Opportunities for Chewy and Haverty Furniture

-0.51

Correlation Coefficient

Chewy  Haverty Furniture

Excellent diversification

The 3 months correlation between Chewy and Haverty is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chewy Inc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Chewy 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 Chewy Inc 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 Chewy i.e., Chewy and Haverty Furniture go up and down completely randomly.

Pair Corralation between Chewy and Haverty Furniture

Given the investment horizon of 90 days Chewy Inc is expected to generate 2.24 times more return on investment than Haverty Furniture. However, Chewy is 2.24 times more volatile than Haverty Furniture Companies. It trades about 0.22 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.16 per unit of risk. If you would invest  3,372  in Chewy Inc on October 21, 2024 and sell it today you would earn a total of  329.00  from holding Chewy Inc or generate 9.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chewy Inc  vs.  Haverty Furniture Companies

Chewy Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chewy Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Chewy showed solid returns over the last few months and may actually be approaching a breakup point.

Haverty Furniture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haverty Furniture Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chewy and Haverty Furniture

The main advantage of trading using opposite Chewy and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chewy 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.

The idea behind Chewy Inc and Haverty Furniture Companies 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.