Correlation Between ICU Medical and HNI Corp
Can any of the company-specific risk be diversified away by investing in both ICU Medical and HNI Corp 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 ICU Medical and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and HNI Corp, you can compare the effects of market volatilities on ICU Medical and HNI Corp 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 ICU Medical with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and HNI Corp.
Diversification Opportunities for ICU Medical and HNI Corp
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICU and HNI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and ICU Medical 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 ICU Medical are associated (or correlated) with HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of ICU Medical i.e., ICU Medical and HNI Corp go up and down completely randomly.
Pair Corralation between ICU Medical and HNI Corp
Given the investment horizon of 90 days ICU Medical is expected to generate 1.6 times more return on investment than HNI Corp. However, ICU Medical is 1.6 times more volatile than HNI Corp. It trades about 0.11 of its potential returns per unit of risk. HNI Corp is currently generating about 0.1 per unit of risk. If you would invest 10,250 in ICU Medical on September 1, 2024 and sell it today you would earn a total of 6,146 from holding ICU Medical or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. HNI Corp
Performance |
| Timeline |
| ICU Medical |
| HNI Corp |
ICU Medical and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and HNI Corp
The main advantage of trading using opposite ICU Medical and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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