Correlation Between Mills Music and Hawkins

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

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

Diversification Opportunities for Mills Music and Hawkins

0.54

Correlation Coefficient

Mills Music  Hawkins

Very weak diversification

The 3 months correlation between Mills and Hawkins is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mills Music Trust and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Mills Music 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 Mills Music Trust are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Mills Music i.e., Mills Music and Hawkins go up and down completely randomly.

Pair Corralation between Mills Music and Hawkins

Assuming the 90 days horizon Mills Music is expected to generate 6.7 times less return on investment than Hawkins. In addition to that, Mills Music is 1.54 times more volatile than Hawkins. It trades about 0.01 of its total potential returns per unit of risk. Hawkins is currently generating about 0.1 per unit of volatility. If you would invest  3,852  in Hawkins on October 13, 2024 and sell it today you would earn a total of  7,132  from holding Hawkins or generate 185.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.12%
Values	Daily Returns

Mills Music Trust  vs.  Hawkins

Mills Music Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mills Music Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mills Music is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Hawkins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mills Music and Hawkins

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

The idea behind Mills Music Trust and Hawkins 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.