Correlation Between HNI Corp and IPG Photonics
Can any of the company-specific risk be diversified away by investing in both HNI Corp and IPG Photonics 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 IPG Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and IPG Photonics, you can compare the effects of market volatilities on HNI Corp and IPG Photonics 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 IPG Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and IPG Photonics.
Diversification Opportunities for HNI Corp and IPG Photonics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HNI and IPG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics 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 IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of HNI Corp i.e., HNI Corp and IPG Photonics go up and down completely randomly.
Pair Corralation between HNI Corp and IPG Photonics
Considering the 90-day investment horizon HNI Corp is expected to generate 0.75 times more return on investment than IPG Photonics. However, HNI Corp is 1.33 times less risky than IPG Photonics. It trades about 0.36 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.14 per unit of risk. If you would invest 4,933 in HNI Corp on August 31, 2024 and sell it today you would earn a total of 694.00 from holding HNI Corp or generate 14.07% 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. IPG Photonics
Performance |
| Timeline |
| HNI Corp |
| IPG Photonics |
HNI Corp and IPG Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and IPG Photonics
The main advantage of trading using opposite HNI Corp and IPG Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, IPG Photonics 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 IPG Photonics will offset losses from the drop in IPG Photonics' long position.| HNI Corp vs. Acco Brands | HNI Corp vs. Acacia Research | HNI Corp vs. Steelcase | HNI Corp vs. International Paper |
| IPG Photonics vs. Teradyne | IPG Photonics vs. Ultra Clean Holdings | IPG Photonics vs. Onto Innovation | IPG Photonics vs. Cohu Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |