Correlation Between HNI Corp and Allient
Can any of the company-specific risk be diversified away by investing in both HNI Corp and Allient 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 Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and Allient, you can compare the effects of market volatilities on HNI Corp and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Allient.
Diversification Opportunities for HNI Corp and Allient
Weak diversification
The 3 months correlation between HNI and Allient is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of HNI Corp i.e., HNI Corp and Allient go up and down completely randomly.
Pair Corralation between HNI Corp and Allient
Considering the 90-day investment horizon HNI Corp is expected to generate 0.59 times more return on investment than Allient. However, HNI Corp is 1.68 times less risky than Allient. It trades about 0.09 of its potential returns per unit of risk. Allient is currently generating about 0.0 per unit of risk. If you would invest 4,852 in HNI Corp on November 7, 2024 and sell it today you would earn a total of 133.00 from holding HNI Corp or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. Allient
Performance |
| Timeline |
| HNI Corp |
| Allient |
HNI Corp and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and Allient
The main advantage of trading using opposite HNI Corp and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.The idea behind HNI Corp and Allient 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.| Allient vs. Hafnia Limited | Allient vs. MYT Netherlands Parent | Allient vs. Jeld Wen Holding | Allient vs. Hudson Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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