Correlation Between Ecoloclean Industrs and Hooker Furniture

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

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

Diversification Opportunities for Ecoloclean Industrs and Hooker Furniture

0.0

Correlation Coefficient

Ecoloclean Industrs  Hooker Furniture

Pay attention - limited upside

The 3 months correlation between Ecoloclean and Hooker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecoloclean Industrs and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Ecoloclean Industrs 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 Ecoloclean Industrs 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 Ecoloclean Industrs i.e., Ecoloclean Industrs and Hooker Furniture go up and down completely randomly.

Pair Corralation between Ecoloclean Industrs and Hooker Furniture

Given the investment horizon of 90 days Ecoloclean Industrs is expected to under-perform the Hooker Furniture. In addition to that, Ecoloclean Industrs is 1.65 times more volatile than Hooker Furniture. It trades about -0.04 of its total potential returns per unit of risk. Hooker Furniture is currently generating about -0.01 per unit of volatility. If you would invest  1,844  in Hooker Furniture on October 3, 2024 and sell it today you would lose (443.00) from holding Hooker Furniture or give up 24.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Ecoloclean Industrs  vs.  Hooker Furniture

Ecoloclean Industrs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecoloclean Industrs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Ecoloclean Industrs is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Hooker Furniture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hooker Furniture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental 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 Ecoloclean Industrs and Hooker Furniture

The main advantage of trading using opposite Ecoloclean Industrs and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecoloclean Industrs 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 Ecoloclean Industrs 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.