Correlation Between HNI Corp and BitFuFu Warrant

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

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

Diversification Opportunities for HNI Corp and BitFuFu Warrant

0.08

Correlation Coefficient

HNI Corp  BitFuFu Warrant

Significant diversification

The 3 months correlation between HNI and BitFuFu is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and BitFuFu Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Warrant 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 BitFuFu Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Warrant has no effect on the direction of HNI Corp i.e., HNI Corp and BitFuFu Warrant go up and down completely randomly.

Pair Corralation between HNI Corp and BitFuFu Warrant

Considering the 90-day investment horizon HNI Corp is expected to generate 0.19 times more return on investment than BitFuFu Warrant. However, HNI Corp is 5.37 times less risky than BitFuFu Warrant. It trades about 0.03 of its potential returns per unit of risk. BitFuFu Warrant is currently generating about 0.0 per unit of risk. If you would invest  4,625  in HNI Corp on February 21, 2025 and sell it today you would earn a total of  103.00  from holding HNI Corp or generate 2.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

HNI Corp  vs.  BitFuFu Warrant

HNI Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 2 (%) 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.

BitFuFu Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days BitFuFu Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BitFuFu Warrant is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HNI Corp and BitFuFu Warrant

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

The idea behind HNI Corp and BitFuFu Warrant 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.