Correlation Between HAVERTY FURNITURE and LEONS FURNITURE
Can any of the company-specific risk be diversified away by investing in both HAVERTY FURNITURE and LEONS 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 HAVERTY FURNITURE and LEONS FURNITURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAVERTY FURNITURE A and LEONS FURNITURE, you can compare the effects of market volatilities on HAVERTY FURNITURE and LEONS 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 HAVERTY FURNITURE with a short position of LEONS FURNITURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAVERTY FURNITURE and LEONS FURNITURE.
Diversification Opportunities for HAVERTY FURNITURE and LEONS FURNITURE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HAVERTY and LEONS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HAVERTY FURNITURE A and LEONS FURNITURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEONS FURNITURE 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 A are associated (or correlated) with LEONS FURNITURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEONS FURNITURE has no effect on the direction of HAVERTY FURNITURE i.e., HAVERTY FURNITURE and LEONS FURNITURE go up and down completely randomly.
Pair Corralation between HAVERTY FURNITURE and LEONS FURNITURE
Assuming the 90 days trading horizon HAVERTY FURNITURE A is expected to generate 1.51 times more return on investment than LEONS FURNITURE. However, HAVERTY FURNITURE is 1.51 times more volatile than LEONS FURNITURE. It trades about 0.13 of its potential returns per unit of risk. LEONS FURNITURE is currently generating about 0.16 per unit of risk. If you would invest 1,389 in HAVERTY FURNITURE A on April 24, 2025 and sell it today you would earn a total of 311.00 from holding HAVERTY FURNITURE A or generate 22.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
HAVERTY FURNITURE A vs. LEONS FURNITURE
Performance |
Timeline |
HAVERTY FURNITURE |
LEONS FURNITURE |
HAVERTY FURNITURE and LEONS FURNITURE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HAVERTY FURNITURE and LEONS FURNITURE
The main advantage of trading using opposite HAVERTY FURNITURE and LEONS FURNITURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAVERTY FURNITURE position performs unexpectedly, LEONS 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 LEONS FURNITURE will offset losses from the drop in LEONS FURNITURE's long position.HAVERTY FURNITURE vs. China Communications Services | HAVERTY FURNITURE vs. INDOFOOD AGRI RES | HAVERTY FURNITURE vs. Cal Maine Foods | HAVERTY FURNITURE vs. Lifeway Foods |
LEONS FURNITURE vs. Jupiter Fund Management | LEONS FURNITURE vs. LANDSEA GREEN MANAGEMENT | LEONS FURNITURE vs. Microchip Technology Incorporated | LEONS FURNITURE vs. AviChina Industry Technology |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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