Correlation Between Miller Opportunity and CHURCH

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

By analyzing existing cross correlation between Miller Opportunity Trust and CHURCH DWIGHT INC, you can compare the effects of market volatilities on Miller Opportunity and CHURCH 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 Miller Opportunity with a short position of CHURCH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Opportunity and CHURCH.

Diversification Opportunities for Miller Opportunity and CHURCH

-0.33

Correlation Coefficient

Miller Opportunity  CHURCH

Very good diversification

The 3 months correlation between Miller and CHURCH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Miller Opportunity Trust and CHURCH DWIGHT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHURCH DWIGHT INC and Miller Opportunity 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 Miller Opportunity Trust are associated (or correlated) with CHURCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHURCH DWIGHT INC has no effect on the direction of Miller Opportunity i.e., Miller Opportunity and CHURCH go up and down completely randomly.

Pair Corralation between Miller Opportunity and CHURCH

Assuming the 90 days horizon Miller Opportunity Trust is expected to generate 1.83 times more return on investment than CHURCH. However, Miller Opportunity is 1.83 times more volatile than CHURCH DWIGHT INC. It trades about -0.1 of its potential returns per unit of risk. CHURCH DWIGHT INC is currently generating about -0.26 per unit of risk. If you would invest  4,110  in Miller Opportunity Trust on October 12, 2024 and sell it today you would lose (116.00) from holding Miller Opportunity Trust or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Miller Opportunity Trust  vs.  CHURCH DWIGHT INC

Miller Opportunity Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Miller Opportunity Trust are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Miller Opportunity may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CHURCH DWIGHT INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHURCH DWIGHT INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CHURCH is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Miller Opportunity and CHURCH

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

The idea behind Miller Opportunity Trust and CHURCH DWIGHT INC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.