Correlation Between Kirklands and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Kirklands 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 Kirklands and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirklands and Haverty Furniture Companies, you can compare the effects of market volatilities on Kirklands 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 Kirklands with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirklands and Haverty Furniture.
Diversification Opportunities for Kirklands and Haverty Furniture
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kirklands and Haverty is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kirklands and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Kirklands 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 Kirklands 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 Kirklands i.e., Kirklands and Haverty Furniture go up and down completely randomly.
Pair Corralation between Kirklands and Haverty Furniture
Given the investment horizon of 90 days Kirklands is expected to under-perform the Haverty Furniture. In addition to that, Kirklands is 1.67 times more volatile than Haverty Furniture Companies. It trades about -0.16 of its total potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.5 per unit of volatility. If you would invest 3,036 in Haverty Furniture Companies on January 31, 2024 and sell it today you would earn a total of 209.00 from holding Haverty Furniture Companies or generate 6.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 18.18% |
Values | Daily Returns |
Kirklands vs. Haverty Furniture Companies
Performance |
Timeline |
Kirklands |
Haverty Furniture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kirklands and Haverty Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kirklands and Haverty Furniture
The main advantage of trading using opposite Kirklands and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirklands 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.Kirklands vs. Custom Truck One | Kirklands vs. PROG Holdings | Kirklands vs. McGrath RentCorp | Kirklands vs. HE Equipment Services |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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