Correlation Between HNI Corp and Artisan Partners

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

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

Diversification Opportunities for HNI Corp and Artisan Partners

0.81

Correlation Coefficient

HNI Corp  Artisan Partners

Very poor diversification

The 3 months correlation between HNI and Artisan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and HNI Corp 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 HNI Corp are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of HNI Corp i.e., HNI Corp and Artisan Partners go up and down completely randomly.

Pair Corralation between HNI Corp and Artisan Partners

Considering the 90-day investment horizon HNI Corp is expected to under-perform the Artisan Partners. In addition to that, HNI Corp is 1.48 times more volatile than Artisan Partners Asset. It trades about -0.08 of its total potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.02 per unit of volatility. If you would invest  4,687  in Artisan Partners Asset on September 17, 2024 and sell it today you would earn a total of  9.00  from holding Artisan Partners Asset or generate 0.19% return on investment over 90 days.

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

HNI Corp  vs.  Artisan Partners Asset

HNI Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Artisan Partners Asset

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HNI Corp and Artisan Partners

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

The idea behind HNI Corp and Artisan Partners Asset 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.