Correlation Between Culp and Haverty Furniture

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

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

Diversification Opportunities for Culp and Haverty Furniture

0.58

Correlation Coefficient

Culp  Haverty Furniture

Very weak diversification

The 3 months correlation between Culp and Haverty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Culp Inc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Culp 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 Culp Inc 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 Culp i.e., Culp and Haverty Furniture go up and down completely randomly.

Pair Corralation between Culp and Haverty Furniture

Given the investment horizon of 90 days Culp Inc is expected to generate 0.48 times more return on investment than Haverty Furniture. However, Culp Inc is 2.1 times less risky than Haverty Furniture. It trades about -0.02 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.03 per unit of risk. If you would invest  452.00  in Culp Inc on July 4, 2025 and sell it today you would lose (19.00) from holding Culp Inc or give up 4.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	33.33%
Values	Daily Returns

Culp Inc  vs.  Haverty Furniture Companies

Culp Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Culp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Culp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Haverty Furniture

Risk-Adjusted Performance

Weakest

Over the last 90 days Haverty Furniture Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Culp and Haverty Furniture

The main advantage of trading using opposite Culp and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Culp 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 Culp Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.