Correlation Between HNI Corp and Acme United

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

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

Diversification Opportunities for HNI Corp and Acme United

-0.66

Correlation Coefficient

HNI Corp  Acme United

Excellent diversification

The 3 months correlation between HNI and Acme is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of HNI Corp i.e., HNI Corp and Acme United go up and down completely randomly.

Pair Corralation between HNI Corp and Acme United

Considering the 90-day investment horizon HNI Corp is expected to generate 3.46 times less return on investment than Acme United. But when comparing it to its historical volatility, HNI Corp is 1.44 times less risky than Acme United. It trades about 0.07 of its potential returns per unit of risk. Acme United is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,722  in Acme United on January 3, 2025 and sell it today you would earn a total of  243.50  from holding Acme United or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

HNI Corp  vs.  Acme United

HNI Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Acme United

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Acme United are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental indicators, Acme United may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with HNI Corp and Acme United

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

The idea behind HNI Corp and Acme United 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.