Correlation Between HNI Corp and Ennis

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

By analyzing existing cross correlation between HNI Corp and Ennis Inc, you can compare the effects of market volatilities on HNI Corp and Ennis 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 Ennis. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Ennis.

Diversification Opportunities for HNI Corp and Ennis

0.5

Correlation Coefficient

HNI Corp  Ennis

Very weak diversification

The 3 months correlation between HNI and Ennis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Ennis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennis Inc 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 Ennis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennis Inc has no effect on the direction of HNI Corp i.e., HNI Corp and Ennis go up and down completely randomly.

Pair Corralation between HNI Corp and Ennis

Considering the 90-day investment horizon HNI Corp is expected to under-perform the Ennis. In addition to that, HNI Corp is 1.75 times more volatile than Ennis Inc. It trades about -0.16 of its total potential returns per unit of risk. Ennis Inc is currently generating about 0.03 per unit of volatility. If you would invest  2,107  in Ennis Inc on November 28, 2024 and sell it today you would earn a total of  26.00  from holding Ennis Inc or generate 1.23% return on investment over 90 days.

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

HNI Corp  vs.  Ennis Inc

HNI Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Ennis Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ennis Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Ennis is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HNI Corp and Ennis

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

The idea behind HNI Corp and Ennis Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .