Correlation Between Kingfisher Plc and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Kingfisher Plc 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 Kingfisher Plc and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingfisher plc and Haverty Furniture Companies, you can compare the effects of market volatilities on Kingfisher Plc 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 Kingfisher Plc with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfisher Plc and Haverty Furniture.
Diversification Opportunities for Kingfisher Plc and Haverty Furniture
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kingfisher and Haverty is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kingfisher plc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Kingfisher Plc 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 Kingfisher plc 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 Kingfisher Plc i.e., Kingfisher Plc and Haverty Furniture go up and down completely randomly.
Pair Corralation between Kingfisher Plc and Haverty Furniture
Assuming the 90 days horizon Kingfisher plc is expected to generate 1.84 times more return on investment than Haverty Furniture. However, Kingfisher Plc is 1.84 times more volatile than Haverty Furniture Companies. It trades about 0.03 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.13 per unit of risk. If you would invest 317.00 in Kingfisher plc on January 31, 2024 and sell it today you would earn a total of 3.00 from holding Kingfisher plc or generate 0.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kingfisher plc vs. Haverty Furniture Companies
Performance |
Timeline |
Kingfisher plc |
Haverty Furniture |
Kingfisher Plc and Haverty Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kingfisher Plc and Haverty Furniture
The main advantage of trading using opposite Kingfisher Plc and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingfisher Plc 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.Kingfisher Plc vs. Haverty Furniture Companies | Kingfisher Plc vs. Arhaus Inc | Kingfisher Plc vs. LL Flooring Holdings | Kingfisher Plc vs. Home Depot |
Haverty Furniture vs. Custom Truck One | Haverty Furniture vs. PROG Holdings | Haverty Furniture vs. McGrath RentCorp | Haverty Furniture vs. HE Equipment Services |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |