Correlation Between Haverty Furniture and Algonquin Power

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

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

Diversification Opportunities for Haverty Furniture and Algonquin Power

0.5

Correlation Coefficient

Haverty Furniture  Algonquin Power

Very weak diversification

The 3 months correlation between Haverty and Algonquin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and Haverty Furniture 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 Haverty Furniture Companies are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Algonquin Power go up and down completely randomly.

Pair Corralation between Haverty Furniture and Algonquin Power

Assuming the 90 days horizon Haverty Furniture Companies is expected to generate 1.56 times more return on investment than Algonquin Power. However, Haverty Furniture is 1.56 times more volatile than Algonquin Power Utilities. It trades about 0.0 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about 0.0 per unit of risk. If you would invest  2,064  in Haverty Furniture Companies on April 5, 2025 and sell it today you would lose (274.00) from holding Haverty Furniture Companies or give up 13.28% of portfolio value over 90 days.

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

Haverty Furniture Companies  vs.  Algonquin Power Utilities

Haverty Furniture

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haverty Furniture Companies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Haverty Furniture reported solid returns over the last few months and may actually be approaching a breakup point.

Algonquin Power Utilities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Algonquin Power Utilities are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Algonquin Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haverty Furniture and Algonquin Power

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

The idea behind Haverty Furniture Companies and Algonquin Power Utilities 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.