Correlation Between Hooker Furniture and Ispire Technology
Can any of the company-specific risk be diversified away by investing in both Hooker Furniture and Ispire Technology 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 Ispire Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hooker Furniture and Ispire Technology Common, you can compare the effects of market volatilities on Hooker Furniture and Ispire Technology 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 Ispire Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hooker Furniture and Ispire Technology.
Diversification Opportunities for Hooker Furniture and Ispire Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hooker and Ispire is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Ispire Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ispire Technology Common 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 Ispire Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ispire Technology Common has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Ispire Technology go up and down completely randomly.
Pair Corralation between Hooker Furniture and Ispire Technology
Given the investment horizon of 90 days Hooker Furniture is expected to generate 0.69 times more return on investment than Ispire Technology. However, Hooker Furniture is 1.45 times less risky than Ispire Technology. It trades about 0.01 of its potential returns per unit of risk. Ispire Technology Common is currently generating about -0.07 per unit of risk. If you would invest 1,289 in Hooker Furniture on December 11, 2024 and sell it today you would lose (1.00) from holding Hooker Furniture or give up 0.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hooker Furniture vs. Ispire Technology Common
Performance |
Timeline |
Hooker Furniture |
Ispire Technology Common |
Hooker Furniture and Ispire Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hooker Furniture and Ispire Technology
The main advantage of trading using opposite Hooker Furniture and Ispire Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture position performs unexpectedly, Ispire Technology 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 Ispire Technology will offset losses from the drop in Ispire Technology's long position.Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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