Correlation Between Postal Realty and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Postal Realty 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 Postal Realty and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and HNI Corp, you can compare the effects of market volatilities on Postal Realty 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 Postal Realty with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and HNI Corp.
Diversification Opportunities for Postal Realty and HNI Corp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Postal and HNI is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Postal Realty 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 Postal Realty Trust 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 Postal Realty i.e., Postal Realty and HNI Corp go up and down completely randomly.
Pair Corralation between Postal Realty and HNI Corp
Given the investment horizon of 90 days Postal Realty Trust is expected to under-perform the HNI Corp. But the stock apears to be less risky and, when comparing its historical volatility, Postal Realty Trust is 1.5 times less risky than HNI Corp. The stock trades about -0.11 of its potential returns per unit of risk. The HNI Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,152 in HNI Corp on August 28, 2024 and sell it today you would earn a total of 597.00 from holding HNI Corp or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Realty Trust vs. HNI Corp
Performance |
| Timeline |
| Postal Realty Trust |
| HNI Corp |
Postal Realty and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and HNI Corp
The main advantage of trading using opposite Postal Realty and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty 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.| Postal Realty vs. Office Properties Income | Postal Realty vs. Boston Properties | Postal Realty vs. SL Green Realty | Postal Realty vs. Alexandria Real Estate |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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