Correlation Between Hooker Furniture and Siriuspoint

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

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

Diversification Opportunities for Hooker Furniture and Siriuspoint

0.09

Correlation Coefficient

Hooker Furniture  Siriuspoint

Significant diversification

The 3 months correlation between Hooker and Siriuspoint is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Siriuspoint go up and down completely randomly.

Pair Corralation between Hooker Furniture and Siriuspoint

Given the investment horizon of 90 days Hooker Furniture is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Hooker Furniture is 1.37 times less risky than Siriuspoint. The stock trades about -0.13 of its potential returns per unit of risk. The Siriuspoint is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,415  in Siriuspoint on December 23, 2024 and sell it today you would earn a total of  161.00  from holding Siriuspoint or generate 11.38% return on investment over 90 days.

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

Hooker Furniture  vs.  Siriuspoint

Hooker Furniture

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Siriuspoint

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hooker Furniture and Siriuspoint

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

The idea behind Hooker Furniture and Siriuspoint 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.