Correlation Between Herman Miller and HNI
Can any of the company-specific risk be diversified away by investing in both Herman Miller and HNI 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 Herman Miller and HNI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herman Miller and HNI Corporation, you can compare the effects of market volatilities on Herman Miller and HNI 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 Herman Miller with a short position of HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herman Miller and HNI.
Diversification Opportunities for Herman Miller and HNI
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Herman and HNI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Herman Miller and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation and Herman Miller 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 Herman Miller are associated (or correlated) with HNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corporation has no effect on the direction of Herman Miller i.e., Herman Miller and HNI go up and down completely randomly.
Pair Corralation between Herman Miller and HNI
Assuming the 90 days horizon Herman Miller is expected to generate 32.8 times less return on investment than HNI. In addition to that, Herman Miller is 1.5 times more volatile than HNI Corporation. It trades about 0.0 of its total potential returns per unit of risk. HNI Corporation is currently generating about 0.11 per unit of volatility. If you would invest 4,630 in HNI Corporation on September 14, 2024 and sell it today you would earn a total of 520.00 from holding HNI Corporation or generate 11.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Herman Miller vs. HNI Corp.
Performance |
Timeline |
Herman Miller |
HNI Corporation |
Herman Miller and HNI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Herman Miller and HNI
The main advantage of trading using opposite Herman Miller and HNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herman Miller position performs unexpectedly, HNI 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 will offset losses from the drop in HNI's long position.Herman Miller vs. Choice Hotels International | Herman Miller vs. Dalata Hotel Group | Herman Miller vs. Universal Entertainment | Herman Miller vs. JD SPORTS FASH |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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