Correlation Between HNI Corp and Contextlogic
Can any of the company-specific risk be diversified away by investing in both HNI Corp and Contextlogic 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 Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and Contextlogic, you can compare the effects of market volatilities on HNI Corp and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Contextlogic.
Diversification Opportunities for HNI Corp and Contextlogic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HNI and Contextlogic is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of HNI Corp i.e., HNI Corp and Contextlogic go up and down completely randomly.
Pair Corralation between HNI Corp and Contextlogic
Considering the 90-day investment horizon HNI Corp is expected to under-perform the Contextlogic. But the stock apears to be less risky and, when comparing its historical volatility, HNI Corp is 1.1 times less risky than Contextlogic. The stock trades about -0.05 of its potential returns per unit of risk. The Contextlogic is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 711.00 in Contextlogic on November 6, 2024 and sell it today you would earn a total of 71.00 from holding Contextlogic or generate 9.99% 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. Contextlogic
Performance |
| Timeline |
| HNI Corp |
| Contextlogic |
HNI Corp and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and Contextlogic
The main advantage of trading using opposite HNI Corp and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.The idea behind HNI Corp and Contextlogic 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.| Contextlogic vs. Skillful Craftsman Education | Contextlogic vs. Encore Capital Group | Contextlogic vs. Aldel Financial II | Contextlogic vs. Nasdaq 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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