Correlation Between Emerald Expositions and HNI Corp

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Can any of the company-specific risk be diversified away by investing in both Emerald Expositions and HNI Corp 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 Emerald Expositions and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Expositions Events and HNI Corp, you can compare the effects of market volatilities on Emerald Expositions and HNI Corp 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 Emerald Expositions with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Expositions and HNI Corp.

Diversification Opportunities for Emerald Expositions and HNI Corp

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Emerald and HNI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Expositions Events and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Emerald Expositions 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 Emerald Expositions Events are associated (or correlated) with HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Emerald Expositions i.e., Emerald Expositions and HNI Corp go up and down completely randomly.

Pair Corralation between Emerald Expositions and HNI Corp

Considering the 90-day investment horizon Emerald Expositions Events is expected to under-perform the HNI Corp. But the stock apears to be less risky and, when comparing its historical volatility, Emerald Expositions Events is 1.15 times less risky than HNI Corp. The stock trades about -0.09 of its potential returns per unit of risk. The HNI Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  5,163  in HNI Corp on October 21, 2024 and sell it today you would lose (78.00) from holding HNI Corp or give up 1.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Emerald Expositions Events  vs.  HNI Corp

 Performance 
       Timeline  
Emerald Expositions 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Expositions Events are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Emerald Expositions may actually be approaching a critical reversion point that can send shares even higher in February 2025.
HNI Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, HNI Corp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Emerald Expositions and HNI Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Emerald Expositions and HNI Corp

The main advantage of trading using opposite Emerald Expositions and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Expositions position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.
The idea behind Emerald Expositions Events and HNI Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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