Correlation Between INTERSHOP Communications and Haverty Furniture

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

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

Diversification Opportunities for INTERSHOP Communications and Haverty Furniture

-0.4

Correlation Coefficient

INTERSHOP Communications  Haverty Furniture

Very good diversification

The 3 months correlation between INTERSHOP and Haverty is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and Haverty Furniture go up and down completely randomly.

Pair Corralation between INTERSHOP Communications and Haverty Furniture

Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to generate 1.39 times more return on investment than Haverty Furniture. However, INTERSHOP Communications is 1.39 times more volatile than Haverty Furniture Companies. It trades about 0.06 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.03 per unit of risk. If you would invest  175.00  in INTERSHOP Communications Aktiengesellschaft on December 24, 2024 and sell it today you would earn a total of  18.00  from holding INTERSHOP Communications Aktiengesellschaft or generate 10.29% return on investment over 90 days.

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

INTERSHOP Communications Aktie  vs.  Haverty Furniture Companies

INTERSHOP Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTERSHOP Communications Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, INTERSHOP Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly stable basic indicators, Haverty Furniture is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTERSHOP Communications and Haverty Furniture

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

The idea behind INTERSHOP Communications Aktiengesellschaft and Haverty Furniture Companies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.