Correlation Between HNI Corp and APPLE

Can any of the company-specific risk be diversified away by investing in both HNI Corp and APPLE 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 APPLE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HNI Corp and APPLE INC 3, you can compare the effects of market volatilities on HNI Corp and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and APPLE.

Diversification Opportunities for HNI Corp and APPLE

-0.52

Correlation Coefficient

HNI Corp  APPLE

Excellent diversification

The 3 months correlation between HNI and APPLE is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and APPLE INC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 3 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC 3 has no effect on the direction of HNI Corp i.e., HNI Corp and APPLE go up and down completely randomly.

Pair Corralation between HNI Corp and APPLE

Considering the 90-day investment horizon HNI Corp is expected to generate 4.66 times more return on investment than APPLE. However, HNI Corp is 4.66 times more volatile than APPLE INC 3. It trades about 0.09 of its potential returns per unit of risk. APPLE INC 3 is currently generating about 0.02 per unit of risk. If you would invest  2,632  in HNI Corp on September 13, 2024 and sell it today you would earn a total of  2,750  from holding HNI Corp or generate 104.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

HNI Corp  vs.  APPLE INC 3

HNI Corp

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, HNI Corp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

APPLE INC 3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APPLE INC 3 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APPLE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HNI Corp and APPLE

The main advantage of trading using opposite HNI Corp and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.

The idea behind HNI Corp and APPLE INC 3 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.