Correlation Between Canterbury Park and Bassett Furniture

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

By analyzing existing cross correlation between Canterbury Park Holding and Bassett Furniture Industries, you can compare the effects of market volatilities on Canterbury Park and Bassett 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 Canterbury Park with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canterbury Park and Bassett Furniture.

Diversification Opportunities for Canterbury Park and Bassett Furniture

-0.18

Correlation Coefficient

Canterbury Park  Bassett Furniture

Good diversification

The 3 months correlation between Canterbury and Bassett is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canterbury Park Holding and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and Canterbury Park 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 Canterbury Park Holding are associated (or correlated) with Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Canterbury Park i.e., Canterbury Park and Bassett Furniture go up and down completely randomly.

Pair Corralation between Canterbury Park and Bassett Furniture

Given the investment horizon of 90 days Canterbury Park Holding is expected to generate 0.58 times more return on investment than Bassett Furniture. However, Canterbury Park Holding is 1.72 times less risky than Bassett Furniture. It trades about 0.06 of its potential returns per unit of risk. Bassett Furniture Industries is currently generating about -0.03 per unit of risk. If you would invest  1,695  in Canterbury Park Holding on May 7, 2025 and sell it today you would earn a total of  99.00  from holding Canterbury Park Holding or generate 5.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Canterbury Park Holding  vs.  Bassett Furniture Industries

Canterbury Park Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canterbury Park Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Canterbury Park may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Bassett Furniture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bassett Furniture Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Bassett Furniture is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Canterbury Park and Bassett Furniture

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

The idea behind Canterbury Park Holding and Bassett Furniture Industries 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.