Correlation Between Haverty Furniture and Bill

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

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

Diversification Opportunities for Haverty Furniture and Bill

-0.65

Correlation Coefficient

Haverty Furniture  Bill

Excellent diversification

The 3 months correlation between Haverty and Bill is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and Haverty 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 Haverty Furniture Companies are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Haverty Furniture i.e., Haverty Furniture and Bill go up and down completely randomly.

Pair Corralation between Haverty Furniture and Bill

Considering the 90-day investment horizon Haverty Furniture Companies is expected to under-perform the Bill. But the stock apears to be less risky and, when comparing its historical volatility, Haverty Furniture Companies is 1.61 times less risky than Bill. The stock trades about -0.08 of its potential returns per unit of risk. The Bill Com Holdings is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  5,075  in Bill Com Holdings on September 14, 2024 and sell it today you would earn a total of  3,774  from holding Bill Com Holdings or generate 74.35% return on investment over 90 days.

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

Haverty Furniture Companies  vs.  Bill Com Holdings

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bill Com Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haverty Furniture and Bill

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

The idea behind Haverty Furniture Companies and Bill Com Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.