Correlation Between Haverty Furniture and LL Flooring
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and LL Flooring 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 LL Flooring 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 LL Flooring Holdings, you can compare the effects of market volatilities on Haverty Furniture and LL Flooring 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 LL Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and LL Flooring.
Diversification Opportunities for Haverty Furniture and LL Flooring
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haverty and LL Flooring is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and LL Flooring Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LL Flooring Holdings 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 LL Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LL Flooring Holdings has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and LL Flooring go up and down completely randomly.
Pair Corralation between Haverty Furniture and LL Flooring
Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 1.2 times more return on investment than LL Flooring. However, Haverty Furniture is 1.2 times more volatile than LL Flooring Holdings. It trades about 0.03 of its potential returns per unit of risk. LL Flooring Holdings is currently generating about -0.42 per unit of risk. If you would invest 3,225 in Haverty Furniture Companies on January 26, 2024 and sell it today you would earn a total of 30.00 from holding Haverty Furniture Companies or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. LL Flooring Holdings
Performance |
| Timeline |
| Haverty Furniture |
| LL Flooring Holdings |
Haverty Furniture and LL Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and LL Flooring
The main advantage of trading using opposite Haverty Furniture and LL Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture position performs unexpectedly, LL Flooring 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 LL Flooring will offset losses from the drop in LL Flooring's long position.| Haverty Furniture vs. Custom Truck One | Haverty Furniture vs. PROG Holdings | Haverty Furniture vs. McGrath RentCorp | Haverty Furniture vs. HE Equipment Services |
| LL Flooring vs. Aquagold International | LL Flooring vs. Thrivent High Yield | LL Flooring vs. Morningstar Unconstrained Allocation | LL Flooring vs. Via Renewables |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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