Correlation Between Hooker Furniture and US Global

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

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

Diversification Opportunities for Hooker Furniture and US Global

0.02

Correlation Coefficient

Hooker Furniture  US Global

Significant diversification

The 3 months correlation between Hooker and GROW is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and US Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Investors and Hooker 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 Hooker Furniture are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Investors has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and US Global go up and down completely randomly.

Pair Corralation between Hooker Furniture and US Global

Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the US Global. In addition to that, Hooker Furniture is 1.76 times more volatile than US Global Investors. It trades about -0.01 of its total potential returns per unit of risk. US Global Investors is currently generating about -0.01 per unit of volatility. If you would invest  288.00  in US Global Investors on October 12, 2024 and sell it today you would lose (46.00) from holding US Global Investors or give up 15.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hooker Furniture  vs.  US Global Investors

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

US Global Investors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US Global Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, US Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hooker Furniture and US Global

The main advantage of trading using opposite Hooker Furniture and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.

The idea behind Hooker Furniture and US Global Investors 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.