Correlation Between TRADEDOUBLER and HAVERTY FURNITURE

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

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

Diversification Opportunities for TRADEDOUBLER and HAVERTY FURNITURE

-0.32

Correlation Coefficient

TRADEDOUBLER  HAVERTY FURNITURE

Very good diversification

The 3 months correlation between TRADEDOUBLER and HAVERTY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and HAVERTY FURNITURE A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAVERTY FURNITURE and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and HAVERTY FURNITURE go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and HAVERTY FURNITURE

Assuming the 90 days horizon TRADEDOUBLER is expected to generate 8.31 times less return on investment than HAVERTY FURNITURE. In addition to that, TRADEDOUBLER is 2.28 times more volatile than HAVERTY FURNITURE A. It trades about 0.01 of its total potential returns per unit of risk. HAVERTY FURNITURE A is currently generating about 0.22 per unit of volatility. If you would invest  1,960  in HAVERTY FURNITURE A on October 25, 2024 and sell it today you would earn a total of  80.00  from holding HAVERTY FURNITURE A or generate 4.08% return on investment over 90 days.

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

TRADEDOUBLER AB SK  vs.  HAVERTY FURNITURE A

TRADEDOUBLER AB SK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HAVERTY FURNITURE

Risk-Adjusted Performance

0 of 100

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TRADEDOUBLER and HAVERTY FURNITURE

The main advantage of trading using opposite TRADEDOUBLER and HAVERTY FURNITURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.