Correlation Between HydroGraph Clean and Haverty Furniture

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

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

Diversification Opportunities for HydroGraph Clean and Haverty Furniture

-0.23

Correlation Coefficient

HydroGraph Clean  Haverty Furniture

Very good diversification

The 3 months correlation between HydroGraph and Haverty is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding HydroGraph Clean Power and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and HydroGraph Clean 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 HydroGraph Clean Power 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 HydroGraph Clean i.e., HydroGraph Clean and Haverty Furniture go up and down completely randomly.

Pair Corralation between HydroGraph Clean and Haverty Furniture

Assuming the 90 days horizon HydroGraph Clean Power is expected to generate 2.1 times more return on investment than Haverty Furniture. However, HydroGraph Clean is 2.1 times more volatile than Haverty Furniture Companies. It trades about 0.41 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.17 per unit of risk. If you would invest  6.70  in HydroGraph Clean Power on February 4, 2024 and sell it today you would earn a total of  3.70  from holding HydroGraph Clean Power or generate 55.22% return on investment over 90 days.

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

HydroGraph Clean Power  vs.  Haverty Furniture Companies

HydroGraph Clean Power

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HydroGraph Clean Power are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, HydroGraph Clean reported solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HydroGraph Clean and Haverty Furniture

The main advantage of trading using opposite HydroGraph Clean and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HydroGraph Clean 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 HydroGraph Clean Power 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.