Correlation Between Service International and Haverty Furniture

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

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

Diversification Opportunities for Service International and Haverty Furniture

0.44

Correlation Coefficient

Service International  Haverty Furniture

Very weak diversification

The 3 months correlation between Service and Haverty is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Service International and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Service International 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 Service International 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 Service International i.e., Service International and Haverty Furniture go up and down completely randomly.

Pair Corralation between Service International and Haverty Furniture

Considering the 90-day investment horizon Service International is expected to under-perform the Haverty Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Service International is 2.22 times less risky than Haverty Furniture. The stock trades about 0.0 of its potential returns per unit of risk. The Haverty Furniture Companies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,803  in Haverty Furniture Companies on April 24, 2025 and sell it today you would earn a total of  418.00  from holding Haverty Furniture Companies or generate 23.18% return on investment over 90 days.

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

Service International  vs.  Haverty Furniture Companies

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.

Haverty Furniture

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haverty Furniture Companies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Haverty Furniture unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Service International and Haverty Furniture

The main advantage of trading using opposite Service International and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Service International 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 Service International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.