Correlation Between HNI and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both HNI and Commercial Vehicle 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 and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corporation and Commercial Vehicle Group, you can compare the effects of market volatilities on HNI and Commercial Vehicle 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 with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI and Commercial Vehicle.
Diversification Opportunities for HNI and Commercial Vehicle
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HNI and Commercial is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp. and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and HNI 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 Corporation are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of HNI i.e., HNI and Commercial Vehicle go up and down completely randomly.
Pair Corralation between HNI and Commercial Vehicle
Assuming the 90 days horizon HNI Corporation is expected to generate 0.51 times more return on investment than Commercial Vehicle. However, HNI Corporation is 1.96 times less risky than Commercial Vehicle. It trades about -0.12 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.09 per unit of risk. If you would invest 4,847 in HNI Corporation on November 29, 2024 and sell it today you would lose (287.00) from holding HNI Corporation or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HNI Corp. vs. Commercial Vehicle Group
Performance |
| Timeline |
| HNI Corporation |
| Commercial Vehicle |
HNI and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI and Commercial Vehicle
The main advantage of trading using opposite HNI and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| HNI vs. New Residential Investment | HNI vs. Gladstone Investment | HNI vs. Investment AB Latour | HNI vs. REINET INVESTMENTS SCA |
| Commercial Vehicle vs. X FAB Silicon Foundries | Commercial Vehicle vs. EITZEN CHEMICALS | Commercial Vehicle vs. Sumitomo Chemical | Commercial Vehicle vs. SILICON LABORATOR |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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