Correlation Between Old Republic and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and HNI Corp, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and HNI Corp.
Diversification Opportunities for Old Republic and HNI Corp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and HNI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and HNI Corp go up and down completely randomly.
Pair Corralation between Old Republic and HNI Corp
Considering the 90-day investment horizon Old Republic is expected to generate 1.13 times less return on investment than HNI Corp. But when comparing it to its historical volatility, Old Republic International is 1.62 times less risky than HNI Corp. It trades about 0.55 of its potential returns per unit of risk. HNI Corp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 4,942 in HNI Corp on September 2, 2024 and sell it today you would earn a total of 723.00 from holding HNI Corp or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. HNI Corp
Performance |
| Timeline |
| Old Republic Interna |
| HNI Corp |
Old Republic and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and HNI Corp
The main advantage of trading using opposite Old Republic and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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