Correlation Between Hooker Furniture and Hudson Pacific

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

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

Diversification Opportunities for Hooker Furniture and Hudson Pacific

-0.25

Correlation Coefficient

Hooker Furniture  Hudson Pacific

Very good diversification

The 3 months correlation between Hooker and Hudson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and Hooker 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 Hooker Furniture are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Hooker Furniture i.e., Hooker Furniture and Hudson Pacific go up and down completely randomly.

Pair Corralation between Hooker Furniture and Hudson Pacific

Given the investment horizon of 90 days Hooker Furniture is expected to generate 0.83 times more return on investment than Hudson Pacific. However, Hooker Furniture is 1.21 times less risky than Hudson Pacific. It trades about 0.02 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about -0.16 per unit of risk. If you would invest  1,667  in Hooker Furniture on September 16, 2024 and sell it today you would earn a total of  26.00  from holding Hooker Furniture or generate 1.56% return on investment over 90 days.

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

Hooker Furniture  vs.  Hudson Pacific Properties

Hooker Furniture

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Hooker Furniture is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Hudson Pacific Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Pacific Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hooker Furniture and Hudson Pacific

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

The idea behind Hooker Furniture and Hudson Pacific Properties 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.