Correlation Between Analog Devices and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and HNI Corp, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and HNI Corp.
Diversification Opportunities for Analog Devices and HNI Corp
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Analog and HNI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and HNI Corp go up and down completely randomly.
Pair Corralation between Analog Devices and HNI Corp
Considering the 90-day investment horizon Analog Devices is expected to generate 11.24 times less return on investment than HNI Corp. In addition to that, Analog Devices is 1.19 times more volatile than HNI Corp. It trades about 0.01 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.09 per unit of volatility. If you would invest 5,236 in HNI Corp on September 2, 2024 and sell it today you would earn a total of 429.00 from holding HNI Corp or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. HNI Corp
Performance |
| Timeline |
| Analog Devices |
| HNI Corp |
Analog Devices and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and HNI Corp
The main advantage of trading using opposite Analog Devices and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |