Correlation Between HNI Corp and Ecovyst

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

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

Diversification Opportunities for HNI Corp and Ecovyst

0.43

Correlation Coefficient

HNI Corp  Ecovyst

Very weak diversification

The 3 months correlation between HNI and Ecovyst is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of HNI Corp i.e., HNI Corp and Ecovyst go up and down completely randomly.

Pair Corralation between HNI Corp and Ecovyst

Considering the 90-day investment horizon HNI Corp is expected to generate 0.53 times more return on investment than Ecovyst. However, HNI Corp is 1.89 times less risky than Ecovyst. It trades about -0.21 of its potential returns per unit of risk. Ecovyst is currently generating about -0.16 per unit of risk. If you would invest  4,844  in HNI Corp on December 10, 2024 and sell it today you would lose (413.00) from holding HNI Corp or give up 8.53% of portfolio value over 90 days.

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

HNI Corp  vs.  Ecovyst

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Ecovyst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecovyst 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.

Pair Trading with HNI Corp and Ecovyst

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

The idea behind HNI Corp and Ecovyst 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.