Correlation Between Macys and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Haverty Furniture Companies, you can compare the effects of market volatilities on Macys 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 Macys with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Haverty Furniture.
Diversification Opportunities for Macys and Haverty Furniture
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macys and Haverty is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Macys 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 Macys Inc 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 Macys i.e., Macys and Haverty Furniture go up and down completely randomly.
Pair Corralation between Macys and Haverty Furniture
Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the Haverty Furniture. In addition to that, Macys is 1.17 times more volatile than Haverty Furniture Companies. It trades about -0.2 of its total potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.14 per unit of volatility. If you would invest 3,250 in Haverty Furniture Companies on January 20, 2024 and sell it today you would lose (209.00) from holding Haverty Furniture Companies or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Haverty Furniture Companies
Performance |
| Timeline |
| Macys Inc |
| Haverty Furniture |
Macys and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Haverty Furniture
The main advantage of trading using opposite Macys and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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