Correlation Between Miller Industries and Gentex
Can any of the company-specific risk be diversified away by investing in both Miller Industries and Gentex 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 Industries and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Industries and Gentex, you can compare the effects of market volatilities on Miller Industries and Gentex 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 Industries with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and Gentex.
Diversification Opportunities for Miller Industries and Gentex
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Miller and Gentex is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and Miller Industries 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 Industries are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Miller Industries i.e., Miller Industries and Gentex go up and down completely randomly.
Pair Corralation between Miller Industries and Gentex
Considering the 90-day investment horizon Miller Industries is expected to under-perform the Gentex. In addition to that, Miller Industries is 1.03 times more volatile than Gentex. It trades about -0.26 of its total potential returns per unit of risk. Gentex is currently generating about -0.21 per unit of volatility. If you would invest 2,788 in Gentex on December 5, 2024 and sell it today you would lose (388.00) from holding Gentex or give up 13.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Miller Industries vs. Gentex
Performance |
Timeline |
Miller Industries |
Gentex |
Miller Industries and Gentex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Miller Industries and Gentex
The main advantage of trading using opposite Miller Industries and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Industries position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.Miller Industries vs. Dorman Products | Miller Industries vs. Standard Motor Products | Miller Industries vs. Motorcar Parts of | Miller Industries vs. Douglas Dynamics |
Check out your portfolio center.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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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