Correlation Between Hooker Furniture and Saia

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

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

Diversification Opportunities for Hooker Furniture and Saia

0.54

Correlation Coefficient

Hooker Furniture  Saia

Very weak diversification

The 3 months correlation between Hooker and Saia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Saia go up and down completely randomly.

Pair Corralation between Hooker Furniture and Saia

Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Saia. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 1.1 times less risky than Saia. The stock trades about -0.05 of its potential returns per unit of risk. The Saia Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  45,786  in Saia Inc on September 20, 2024 and sell it today you would earn a total of  7,497  from holding Saia Inc or generate 16.37% return on investment over 90 days.

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

Hooker Furniture  vs.  Saia Inc

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 weak 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.

Saia Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent forward indicators, Saia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hooker Furniture and Saia

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

The idea behind Hooker Furniture and Saia Inc 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.