Correlation Between Nissan Chemical and Haverty Furniture

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

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

Diversification Opportunities for Nissan Chemical and Haverty Furniture

0.01

Correlation Coefficient

Nissan Chemical  Haverty Furniture

Significant diversification

The 3 months correlation between Nissan and Haverty is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nissan Chemical Corp and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Nissan Chemical 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 Nissan Chemical Corp 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 Nissan Chemical i.e., Nissan Chemical and Haverty Furniture go up and down completely randomly.

Pair Corralation between Nissan Chemical and Haverty Furniture

Assuming the 90 days trading horizon Nissan Chemical Corp is expected to generate 0.77 times more return on investment than Haverty Furniture. However, Nissan Chemical Corp is 1.3 times less risky than Haverty Furniture. It trades about -0.02 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.05 per unit of risk. If you would invest  3,480  in Nissan Chemical Corp on October 2, 2024 and sell it today you would lose (500.00) from holding Nissan Chemical Corp or give up 14.37% of portfolio value over 90 days.

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

Nissan Chemical Corp  vs.  Haverty Furniture Companies

Nissan Chemical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Haverty Furniture

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nissan Chemical and Haverty Furniture

The main advantage of trading using opposite Nissan Chemical and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissan Chemical 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 Nissan Chemical Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.