Correlation Between DLH Holdings and MillerKnoll

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

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

Diversification Opportunities for DLH Holdings and MillerKnoll

0.69

Correlation Coefficient

DLH Holdings  MillerKnoll

Poor diversification

The 3 months correlation between DLH and MillerKnoll is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and MillerKnoll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MillerKnoll and DLH Holdings 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 DLH Holdings Corp are associated (or correlated) with MillerKnoll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MillerKnoll has no effect on the direction of DLH Holdings i.e., DLH Holdings and MillerKnoll go up and down completely randomly.

Pair Corralation between DLH Holdings and MillerKnoll

Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the MillerKnoll. In addition to that, DLH Holdings is 1.26 times more volatile than MillerKnoll. It trades about -0.28 of its total potential returns per unit of risk. MillerKnoll is currently generating about -0.07 per unit of volatility. If you would invest  2,210  in MillerKnoll on December 29, 2024 and sell it today you would lose (234.00) from holding MillerKnoll or give up 10.59% of portfolio value over 90 days.

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

DLH Holdings Corp  vs.  MillerKnoll

DLH Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DLH Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MillerKnoll

Risk-Adjusted Performance

Very Weak

Over the last 90 days MillerKnoll has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with DLH Holdings and MillerKnoll

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

The idea behind DLH Holdings Corp and MillerKnoll 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.