Correlation Between East Africa and HNI Corp
Can any of the company-specific risk be diversified away by investing in both East Africa 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 East Africa and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and HNI Corp, you can compare the effects of market volatilities on East Africa 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 East Africa with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and HNI Corp.
Diversification Opportunities for East Africa and HNI Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between East and HNI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and HNI Corp go up and down completely randomly.
Pair Corralation between East Africa and HNI Corp
If you would invest 4,942 in HNI Corp on September 2, 2024 and sell it today you would earn a total of 723.00 from holding HNI Corp or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
East Africa Metals vs. HNI Corp
Performance |
| Timeline |
| East Africa Metals |
| HNI Corp |
East Africa and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and HNI Corp
The main advantage of trading using opposite East Africa and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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