Correlation Between XCPCNL Business and HNI Corp

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

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

Diversification Opportunities for XCPCNL Business and HNI Corp

0.0

Correlation Coefficient

XCPCNL Business  HNI Corp

Pay attention - limited upside

The 3 months correlation between XCPCNL and HNI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XCPCNL Business Services and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and XCPCNL Business 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 XCPCNL Business Services 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 XCPCNL Business i.e., XCPCNL Business and HNI Corp go up and down completely randomly.

Pair Corralation between XCPCNL Business and HNI Corp

Given the investment horizon of 90 days XCPCNL Business Services is expected to generate 75.91 times more return on investment than HNI Corp. However, XCPCNL Business is 75.91 times more volatile than HNI Corp. It trades about 0.11 of its potential returns per unit of risk. HNI Corp is currently generating about 0.07 per unit of risk. If you would invest  0.01  in XCPCNL Business Services on September 28, 2024 and sell it today you would lose (0.01) from holding XCPCNL Business Services or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

XCPCNL Business Services  vs.  HNI Corp

XCPCNL Business Services

Risk-Adjusted Performance

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Very Weak

Over the last 90 days XCPCNL Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with XCPCNL Business and HNI Corp

The main advantage of trading using opposite XCPCNL Business and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCPCNL Business 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 XCPCNL Business Services 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..