Correlation Between Cleanaway Waste and HNI

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

By analyzing existing cross correlation between Cleanaway Waste Management and HNI Corporation, you can compare the effects of market volatilities on Cleanaway Waste 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 Cleanaway Waste with a short position of HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and HNI.

Diversification Opportunities for Cleanaway Waste and HNI

0.09

Correlation Coefficient

Cleanaway Waste  HNI

Significant diversification

The 3 months correlation between Cleanaway and HNI is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation and Cleanaway Waste 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 Cleanaway Waste Management 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 Cleanaway Waste i.e., Cleanaway Waste and HNI go up and down completely randomly.

Pair Corralation between Cleanaway Waste and HNI

Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 11.79 times less return on investment than HNI. In addition to that, Cleanaway Waste is 1.32 times more volatile than HNI Corporation. It trades about 0.01 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cleanaway Waste Management  vs.  HNI Corp.

Cleanaway Waste Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleanaway Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cleanaway Waste is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

HNI Corporation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HNI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cleanaway Waste and HNI

The main advantage of trading using opposite Cleanaway Waste and HNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste 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.

The idea behind Cleanaway Waste Management and HNI Corporation 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.