Correlation Between Vita Coco and Haverty Furniture

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

By analyzing existing cross correlation between Vita Coco and Haverty Furniture Companies, you can compare the effects of market volatilities on Vita Coco 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 Vita Coco with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Haverty Furniture.

Diversification Opportunities for Vita Coco and Haverty Furniture

-0.76

Correlation Coefficient

Vita Coco  Haverty Furniture

Pay attention - limited upside

The 3 months correlation between Vita and Haverty is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Vita Coco 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 Vita Coco 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 Vita Coco i.e., Vita Coco and Haverty Furniture go up and down completely randomly.

Pair Corralation between Vita Coco and Haverty Furniture

Given the investment horizon of 90 days Vita Coco is expected to generate 0.95 times more return on investment than Haverty Furniture. However, Vita Coco is 1.05 times less risky than Haverty Furniture. It trades about 0.21 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  2,813  in Vita Coco on October 1, 2024 and sell it today you would earn a total of  821.00  from holding Vita Coco or generate 29.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Vita Coco  vs.  Haverty Furniture Companies

Vita Coco

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Haverty Furniture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haverty Furniture Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vita Coco and Haverty Furniture

The main advantage of trading using opposite Vita Coco and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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.

The idea behind Vita Coco and Haverty Furniture Companies 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.