Correlation Between Bassett Furniture and SUMIBK

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

By analyzing existing cross correlation between Bassett Furniture Industries and SUMIBK 5386826 14 JAN 27, you can compare the effects of market volatilities on Bassett Furniture and SUMIBK 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 Bassett Furniture with a short position of SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bassett Furniture and SUMIBK.

Diversification Opportunities for Bassett Furniture and SUMIBK

0.11

Correlation Coefficient

Bassett Furniture  SUMIBK

Average diversification

The 3 months correlation between Bassett and SUMIBK is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bassett Furniture Industries and SUMIBK 5386826 14 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 5386826 14 and Bassett Furniture 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 Bassett Furniture Industries are associated (or correlated) with SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 5386826 14 has no effect on the direction of Bassett Furniture i.e., Bassett Furniture and SUMIBK go up and down completely randomly.

Pair Corralation between Bassett Furniture and SUMIBK

Given the investment horizon of 90 days Bassett Furniture Industries is expected to generate 2.89 times more return on investment than SUMIBK. However, Bassett Furniture is 2.89 times more volatile than SUMIBK 5386826 14 JAN 27. It trades about 0.05 of its potential returns per unit of risk. SUMIBK 5386826 14 JAN 27 is currently generating about -0.19 per unit of risk. If you would invest  1,370  in Bassett Furniture Industries on September 14, 2024 and sell it today you would earn a total of  79.00  from holding Bassett Furniture Industries or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	31.25%
Values	Daily Returns

Bassett Furniture Industries  vs.  SUMIBK 5386826 14 JAN 27

Bassett Furniture

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bassett Furniture Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Bassett Furniture may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SUMIBK 5386826 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMIBK 5386826 14 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SUMIBK 5386826 14 JAN 27 investors.

Pair Trading with Bassett Furniture and SUMIBK

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

The idea behind Bassett Furniture Industries and SUMIBK 5386826 14 JAN 27 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.