Correlation Between ALTICE and Haverty Furniture

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

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

Diversification Opportunities for ALTICE and Haverty Furniture

-0.55

Correlation Coefficient

ALTICE  Haverty Furniture

Excellent diversification

The 3 months correlation between ALTICE and Haverty is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ALTICE FRANCE S and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and ALTICE 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 ALTICE FRANCE S 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 ALTICE i.e., ALTICE and Haverty Furniture go up and down completely randomly.

Pair Corralation between ALTICE and Haverty Furniture

Assuming the 90 days trading horizon ALTICE FRANCE S is expected to generate 0.91 times more return on investment than Haverty Furniture. However, ALTICE FRANCE S is 1.1 times less risky than Haverty Furniture. It trades about 0.07 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.06 per unit of risk. If you would invest  7,547  in ALTICE FRANCE S on December 2, 2024 and sell it today you would earn a total of  150.00  from holding ALTICE FRANCE S or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	45.0%
Values	Daily Returns

ALTICE FRANCE S  vs.  Haverty Furniture Companies

ALTICE FRANCE S

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALTICE FRANCE S are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALTICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with ALTICE and Haverty Furniture

The main advantage of trading using opposite ALTICE and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALTICE 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 ALTICE FRANCE S 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.