Correlation Between HNI Corp and Roadzen

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

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

Diversification Opportunities for HNI Corp and Roadzen

-0.31

Correlation Coefficient

HNI Corp  Roadzen

Very good diversification

The 3 months correlation between HNI and Roadzen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Roadzen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadzen 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 Roadzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadzen has no effect on the direction of HNI Corp i.e., HNI Corp and Roadzen go up and down completely randomly.

Pair Corralation between HNI Corp and Roadzen

Considering the 90-day investment horizon HNI Corp is expected to under-perform the Roadzen. But the stock apears to be less risky and, when comparing its historical volatility, HNI Corp is 7.85 times less risky than Roadzen. The stock trades about -0.06 of its potential returns per unit of risk. The Roadzen is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Roadzen on October 8, 2024 and sell it today you would earn a total of  159.00  from holding Roadzen or generate 176.67% return on investment over 90 days.

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

HNI Corp  vs.  Roadzen

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 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.

Roadzen

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roadzen are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Roadzen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HNI Corp and Roadzen

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

The idea behind HNI Corp and Roadzen 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.