Correlation Between RETAIL FOOD and HAVERTY FURNITURE

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

By analyzing existing cross correlation between RETAIL FOOD GROUP and HAVERTY FURNITURE A, you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of HAVERTY FURNITURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and HAVERTY FURNITURE.

Diversification Opportunities for RETAIL FOOD and HAVERTY FURNITURE

0.39

Correlation Coefficient

RETAIL FOOD  HAVERTY FURNITURE

Weak diversification

The 3 months correlation between RETAIL and HAVERTY is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and HAVERTY FURNITURE A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAVERTY FURNITURE and RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and HAVERTY FURNITURE go up and down completely randomly.

Pair Corralation between RETAIL FOOD and HAVERTY FURNITURE

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the HAVERTY FURNITURE. In addition to that, RETAIL FOOD is 1.47 times more volatile than HAVERTY FURNITURE A. It trades about -0.13 of its total potential returns per unit of risk. HAVERTY FURNITURE A is currently generating about 0.01 per unit of volatility. If you would invest  1,933  in HAVERTY FURNITURE A on December 22, 2024 and sell it today you would lose (13.00) from holding HAVERTY FURNITURE A or give up 0.67% of portfolio value over 90 days.

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

RETAIL FOOD GROUP  vs.  HAVERTY FURNITURE A

RETAIL FOOD GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

HAVERTY FURNITURE

Risk-Adjusted Performance

Very Weak

Over the last 90 days HAVERTY FURNITURE A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental 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 RETAIL FOOD and HAVERTY FURNITURE

The main advantage of trading using opposite RETAIL FOOD and HAVERTY FURNITURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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 RETAIL FOOD GROUP and HAVERTY FURNITURE A 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.