Correlation Between Willamette Valley and HNI Corp

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

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

Diversification Opportunities for Willamette Valley and HNI Corp

-0.64

Correlation Coefficient

Willamette Valley  HNI Corp

Excellent diversification

The 3 months correlation between Willamette and HNI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Willamette Valley 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 Willamette Valley Vineyards are associated (or correlated) with HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Willamette Valley i.e., Willamette Valley and HNI Corp go up and down completely randomly.

Pair Corralation between Willamette Valley and HNI Corp

Given the investment horizon of 90 days Willamette Valley Vineyards is expected to generate 0.97 times more return on investment than HNI Corp. However, Willamette Valley Vineyards is 1.04 times less risky than HNI Corp. It trades about 0.13 of its potential returns per unit of risk. HNI Corp is currently generating about -0.12 per unit of risk. If you would invest  580.00  in Willamette Valley Vineyards on December 2, 2024 and sell it today you would earn a total of  32.00  from holding Willamette Valley Vineyards or generate 5.52% return on investment over 90 days.

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

Willamette Valley Vineyards  vs.  HNI Corp

Willamette Valley

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Willamette Valley demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Willamette Valley and HNI Corp

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

The idea behind Willamette Valley Vineyards and HNI Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.