Correlation Between HNI Corp and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both HNI Corp and Park Electrochemical 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 Park Electrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and Park Electrochemical, you can compare the effects of market volatilities on HNI Corp and Park Electrochemical 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 Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Park Electrochemical.
Diversification Opportunities for HNI Corp and Park Electrochemical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HNI and Park is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of HNI Corp i.e., HNI Corp and Park Electrochemical go up and down completely randomly.
Pair Corralation between HNI Corp and Park Electrochemical
Considering the 90-day investment horizon HNI Corp is expected to generate 0.91 times more return on investment than Park Electrochemical. However, HNI Corp is 1.1 times less risky than Park Electrochemical. It trades about 0.13 of its potential returns per unit of risk. Park Electrochemical is currently generating about 0.03 per unit of risk. If you would invest 2,569 in HNI Corp on August 31, 2024 and sell it today you would earn a total of 3,096 from holding HNI Corp or generate 120.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. Park Electrochemical
Performance |
| Timeline |
| HNI Corp |
| Park Electrochemical |
HNI Corp and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and Park Electrochemical
The main advantage of trading using opposite HNI Corp and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| HNI Corp vs. Acco Brands | HNI Corp vs. Acacia Research | HNI Corp vs. Steelcase | HNI Corp vs. International Paper |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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