Correlation Between Haverty Furniture and Service International

Can any of the company-specific risk be diversified away by investing in both Haverty Furniture and Service International 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 Service International 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 Service International, you can compare the effects of market volatilities on Haverty Furniture and Service International 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 Service International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Service International.

Diversification Opportunities for Haverty Furniture and Service International

0.34

Correlation Coefficient

Haverty Furniture  Service International

Weak diversification

The 3 months correlation between Haverty and Service is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Service International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service International 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 Service International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service International has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Service International go up and down completely randomly.

Pair Corralation between Haverty Furniture and Service International

Considering the 90-day investment horizon Haverty Furniture Companies is expected to generate 2.36 times more return on investment than Service International. However, Haverty Furniture is 2.36 times more volatile than Service International. It trades about 0.06 of its potential returns per unit of risk. Service International is currently generating about -0.01 per unit of risk. If you would invest  1,944  in Haverty Furniture Companies on May 1, 2025 and sell it today you would earn a total of  143.00  from holding Haverty Furniture Companies or generate 7.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Haverty Furniture Companies  vs.  Service International

Haverty Furniture

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Haverty Furniture Companies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Haverty Furniture may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Service International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Service International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Service International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Haverty Furniture and Service International

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

The idea behind Haverty Furniture Companies and Service International 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.