Correlation Between Camping World and Haverty Furniture

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

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

Diversification Opportunities for Camping World and Haverty Furniture

-0.38

Correlation Coefficient

Camping World  Haverty Furniture

Very good diversification

The 3 months correlation between Camping and Haverty is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Camping World Holdings and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Camping World 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 Camping World Holdings 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 Camping World i.e., Camping World and Haverty Furniture go up and down completely randomly.

Pair Corralation between Camping World and Haverty Furniture

Considering the 90-day investment horizon Camping World is expected to generate 159.86 times less return on investment than Haverty Furniture. But when comparing it to its historical volatility, Camping World Holdings is 34.93 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 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,154  in Haverty Furniture Companies on September 3, 2024 and sell it today you would lose (743.00) from holding Haverty Furniture Companies or give up 23.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.77%
Values	Daily Returns

Camping World Holdings  vs.  Haverty Furniture Companies

Camping World Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Camping World Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Camping World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Haverty Furniture

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Haverty Furniture Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat uncertain basic indicators, Haverty Furniture sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Camping World and Haverty Furniture

The main advantage of trading using opposite Camping World and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camping World 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 Camping World Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.