Correlation Between Miller Industries and ZOOZ Power

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

By analyzing existing cross correlation between Miller Industries and ZOOZ Power Ltd, you can compare the effects of market volatilities on Miller Industries and ZOOZ Power 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 ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and ZOOZ Power.

Diversification Opportunities for Miller Industries and ZOOZ Power

0.8

Correlation Coefficient

Miller Industries  ZOOZ Power

Very poor diversification

The 3 months correlation between Miller and ZOOZ is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power 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 ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Miller Industries i.e., Miller Industries and ZOOZ Power go up and down completely randomly.

Pair Corralation between Miller Industries and ZOOZ Power

Considering the 90-day investment horizon Miller Industries is expected to generate 0.47 times more return on investment than ZOOZ Power. However, Miller Industries is 2.14 times less risky than ZOOZ Power. It trades about -0.35 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about -0.18 per unit of risk. If you would invest  7,408  in Miller Industries on September 27, 2024 and sell it today you would lose (653.00) from holding Miller Industries or give up 8.81% 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.  ZOOZ Power Ltd

Miller Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Miller Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, Miller Industries reported solid returns over the last few months and may actually be approaching a breakup point.

ZOOZ Power

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Miller Industries and ZOOZ Power

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

The idea behind Miller Industries and ZOOZ Power Ltd 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.