Correlation Between Haverty Furniture and RumbleON

Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and RumbleON 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 RumbleON 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 RumbleON, you can compare the effects of market volatilities on Haverty Furniture and RumbleON 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 RumbleON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and RumbleON.

Diversification Opportunities for Haverty Furniture and RumbleON

0.47

Correlation Coefficient

Haverty Furniture  RumbleON

Very weak diversification

The 3 months correlation between Haverty and RumbleON is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and RumbleON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RumbleON 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 RumbleON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RumbleON has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and RumbleON go up and down completely randomly.

Pair Corralation between Haverty Furniture and RumbleON

Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 0.56 times more return on investment than RumbleON. However, Haverty Furniture Companies is 1.8 times less risky than RumbleON. It trades about -0.04 of its potential returns per unit of risk. RumbleON is currently generating about -0.24 per unit of risk. If you would invest  2,166  in Haverty Furniture Companies on December 29, 2024 and sell it today you would lose (144.00) from holding Haverty Furniture Companies or give up 6.65% of portfolio value over 90 days.

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

Haverty Furniture Companies  vs.  RumbleON

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.

RumbleON

Risk-Adjusted Performance

Very Weak

Over the last 90 days RumbleON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Haverty Furniture and RumbleON

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

The idea behind Haverty Furniture Companies and RumbleON 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.