Correlation Between Biglari Holdings and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings 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 Biglari Holdings and Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Hooker Furniture, you can compare the effects of market volatilities on Biglari Holdings 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 Biglari Holdings with a short position of Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Hooker Furniture.
Diversification Opportunities for Biglari Holdings and Hooker Furniture
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biglari and Hooker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and Hooker Furniture go up and down completely randomly.
Pair Corralation between Biglari Holdings and Hooker Furniture
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.75 times more return on investment than Hooker Furniture. However, Biglari Holdings is 1.33 times less risky than Hooker Furniture. It trades about 0.05 of its potential returns per unit of risk. Hooker Furniture is currently generating about -0.19 per unit of risk. If you would invest 18,402 in Biglari Holdings on March 8, 2024 and sell it today you would earn a total of 1,089 from holding Biglari Holdings or generate 5.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Biglari Holdings vs. Hooker Furniture
Performance |
Timeline |
Biglari Holdings |
Hooker Furniture |
Biglari Holdings and Hooker Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Biglari Holdings and Hooker Furniture
The main advantage of trading using opposite Biglari Holdings and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings 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.Biglari Holdings vs. Americold Realty Trust | Biglari Holdings vs. SEI Investments | Biglari Holdings vs. Gerdau SA ADR | Biglari Holdings vs. Knight Transportation |
Hooker Furniture vs. Virco Manufacturing | Hooker Furniture vs. Energy Focu | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Ethan Allen Interiors |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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