Correlation Between ECD Automotive and HNI Corp

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

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

Diversification Opportunities for ECD Automotive and HNI Corp

-0.07

Correlation Coefficient

ECD Automotive  HNI Corp

Good diversification

The 3 months correlation between ECD and HNI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and ECD Automotive 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 ECD Automotive Design 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 ECD Automotive i.e., ECD Automotive and HNI Corp go up and down completely randomly.

Pair Corralation between ECD Automotive and HNI Corp

Given the investment horizon of 90 days ECD Automotive Design is expected to under-perform the HNI Corp. In addition to that, ECD Automotive is 4.19 times more volatile than HNI Corp. It trades about -0.12 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.02 per unit of volatility. If you would invest  4,596  in HNI Corp on March 2, 2025 and sell it today you would earn a total of  87.00  from holding HNI Corp or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ECD Automotive Design  vs.  HNI Corp

ECD Automotive Design

Risk-Adjusted Performance

Very Weak

Over the last 90 days ECD Automotive Design has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

HNI Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 1 (%) 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.

Pair Trading with ECD Automotive and HNI Corp

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

The idea behind ECD Automotive Design and HNI Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.