Correlation Between HNI Corp and 05379BAR8

Can any of the company-specific risk be diversified away by investing in both HNI Corp and 05379BAR8 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 05379BAR8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HNI Corp and AVA 4 01 APR 52, you can compare the effects of market volatilities on HNI Corp and 05379BAR8 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 05379BAR8. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and 05379BAR8.

Diversification Opportunities for HNI Corp and 05379BAR8

0.61

Correlation Coefficient

HNI Corp  05379BAR8

Poor diversification

The 3 months correlation between HNI and 05379BAR8 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and AVA 4 01 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 05379BAR8 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 05379BAR8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 05379BAR8 has no effect on the direction of HNI Corp i.e., HNI Corp and 05379BAR8 go up and down completely randomly.

Pair Corralation between HNI Corp and 05379BAR8

Considering the 90-day investment horizon HNI Corp is expected to generate 127.77 times less return on investment than 05379BAR8. But when comparing it to its historical volatility, HNI Corp is 2.56 times less risky than 05379BAR8. It trades about 0.0 of its potential returns per unit of risk. AVA 4 01 APR 52 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,817  in AVA 4 01 APR 52 on October 25, 2024 and sell it today you would earn a total of  588.00  from holding AVA 4 01 APR 52 or generate 7.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.9%
Values	Daily Returns

HNI Corp  vs.  AVA 4 01 APR 52

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.

05379BAR8

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AVA 4 01 APR 52 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 05379BAR8 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HNI Corp and 05379BAR8

The main advantage of trading using opposite HNI Corp and 05379BAR8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, 05379BAR8 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 05379BAR8 will offset losses from the drop in 05379BAR8's long position.

The idea behind HNI Corp and AVA 4 01 APR 52 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.