Correlation Between Sunoco LP and Hooker Furniture

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

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

Diversification Opportunities for Sunoco LP and Hooker Furniture

-0.61

Correlation Coefficient

Sunoco LP  Hooker Furniture

Excellent diversification

The 3 months correlation between Sunoco and Hooker is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sunoco LP and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Sunoco LP 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 Sunoco LP are associated (or correlated) with Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Sunoco LP i.e., Sunoco LP and Hooker Furniture go up and down completely randomly.

Pair Corralation between Sunoco LP and Hooker Furniture

Considering the 90-day investment horizon Sunoco LP is expected to generate 0.59 times more return on investment than Hooker Furniture. However, Sunoco LP is 1.68 times less risky than Hooker Furniture. It trades about -0.07 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.41 per unit of risk. If you would invest  5,503  in Sunoco LP on May 4, 2025 and sell it today you would lose (136.00) from holding Sunoco LP or give up 2.47% of portfolio value over 90 days.

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

Sunoco LP  vs.  Hooker Furniture

Sunoco LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunoco LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sunoco LP is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Hooker Furniture

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Hooker Furniture may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Sunoco LP and Hooker Furniture

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

The idea behind Sunoco LP and Hooker Furniture 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.