Correlation Between Adient PLC and Miller Industries
Can any of the company-specific risk be diversified away by investing in both Adient PLC and Miller Industries 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 Adient PLC and Miller Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Miller Industries, you can compare the effects of market volatilities on Adient PLC and Miller Industries 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 Adient PLC with a short position of Miller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Miller Industries.
Diversification Opportunities for Adient PLC and Miller Industries
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adient and Miller is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Miller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Industries and Adient PLC 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 Adient PLC are associated (or correlated) with Miller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Industries has no effect on the direction of Adient PLC i.e., Adient PLC and Miller Industries go up and down completely randomly.
Pair Corralation between Adient PLC and Miller Industries
Given the investment horizon of 90 days Adient PLC is expected to under-perform the Miller Industries. But the stock apears to be less risky and, when comparing its historical volatility, Adient PLC is 1.58 times less risky than Miller Industries. The stock trades about -0.1 of its potential returns per unit of risk. The Miller Industries is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,736 in Miller Industries on August 31, 2024 and sell it today you would earn a total of 736.00 from holding Miller Industries or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adient PLC vs. Miller Industries
Performance |
| Timeline |
| Adient PLC |
| Miller Industries |
Adient PLC and Miller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adient PLC and Miller Industries
The main advantage of trading using opposite Adient PLC and Miller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC position performs unexpectedly, Miller Industries 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 Miller Industries will offset losses from the drop in Miller Industries' long position.| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |