Correlation Between Founder Group and HNI Corp

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

By analyzing existing cross correlation between Founder Group Limited and HNI Corp, you can compare the effects of market volatilities on Founder Group 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 Founder Group with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Founder Group and HNI Corp.

Diversification Opportunities for Founder Group and HNI Corp

0.01

Correlation Coefficient

Founder Group  HNI Corp

Significant diversification

The 3 months correlation between Founder and HNI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Founder Group Limited and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Founder Group 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 Founder Group Limited 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 Founder Group i.e., Founder Group and HNI Corp go up and down completely randomly.

Pair Corralation between Founder Group and HNI Corp

Considering the 90-day investment horizon Founder Group Limited is expected to under-perform the HNI Corp. In addition to that, Founder Group is 8.36 times more volatile than HNI Corp. It trades about 0.0 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.07 per unit of volatility. If you would invest  2,776  in HNI Corp on October 10, 2024 and sell it today you would earn a total of  2,004  from holding HNI Corp or generate 72.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	10.71%
Values	Daily Returns

Founder Group Limited  vs.  HNI Corp

Founder Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Founder Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Founder Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

HNI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Founder Group and HNI Corp

The main advantage of trading using opposite Founder Group and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Founder Group 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 Founder Group Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.