Correlation Between Haverty Furniture and Crown LNG

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

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

Diversification Opportunities for Haverty Furniture and Crown LNG

0.13

Correlation Coefficient

Haverty Furniture  Crown LNG

Average diversification

The 3 months correlation between Haverty and Crown is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Crown LNG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown LNG Holdings and Haverty 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 Haverty Furniture Companies are associated (or correlated) with Crown LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown LNG Holdings has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Crown LNG go up and down completely randomly.

Pair Corralation between Haverty Furniture and Crown LNG

Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 0.19 times more return on investment than Crown LNG. However, Haverty Furniture Companies is 5.23 times less risky than Crown LNG. It trades about 0.0 of its potential returns per unit of risk. Crown LNG Holdings is currently generating about -0.09 per unit of risk. If you would invest  2,388  in Haverty Furniture Companies on December 25, 2024 and sell it today you would lose (274.00) from holding Haverty Furniture Companies or give up 11.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	51.58%
Values	Daily Returns

Haverty Furniture Companies  vs.  Crown LNG Holdings

Haverty Furniture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haverty Furniture Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Haverty Furniture is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Crown LNG Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crown LNG Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, Crown LNG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haverty Furniture and Crown LNG

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

The idea behind Haverty Furniture Companies and Crown LNG Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.