Correlation Between Ethan Allen and MillerKnoll
Can any of the company-specific risk be diversified away by investing in both Ethan Allen and MillerKnoll 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 Ethan Allen and MillerKnoll into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethan Allen Interiors and MillerKnoll, you can compare the effects of market volatilities on Ethan Allen and MillerKnoll 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 Ethan Allen with a short position of MillerKnoll. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethan Allen and MillerKnoll.
Diversification Opportunities for Ethan Allen and MillerKnoll
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ethan and MillerKnoll is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ethan Allen Interiors and MillerKnoll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MillerKnoll and Ethan Allen 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 Ethan Allen Interiors are associated (or correlated) with MillerKnoll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MillerKnoll has no effect on the direction of Ethan Allen i.e., Ethan Allen and MillerKnoll go up and down completely randomly.
Pair Corralation between Ethan Allen and MillerKnoll
Considering the 90-day investment horizon Ethan Allen Interiors is expected to generate 0.67 times more return on investment than MillerKnoll. However, Ethan Allen Interiors is 1.5 times less risky than MillerKnoll. It trades about 0.07 of its potential returns per unit of risk. MillerKnoll is currently generating about -0.18 per unit of risk. If you would invest 2,831 in Ethan Allen Interiors on October 20, 2024 and sell it today you would earn a total of 36.00 from holding Ethan Allen Interiors or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethan Allen Interiors vs. MillerKnoll
Performance |
| Timeline |
| Ethan Allen Interiors |
| MillerKnoll |
Ethan Allen and MillerKnoll Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethan Allen and MillerKnoll
The main advantage of trading using opposite Ethan Allen and MillerKnoll positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethan Allen position performs unexpectedly, MillerKnoll 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 MillerKnoll will offset losses from the drop in MillerKnoll's long position.| Ethan Allen vs. Bassett Furniture Industries | Ethan Allen vs. Natuzzi SpA | Ethan Allen vs. Flexsteel Industries | Ethan Allen vs. Hamilton Beach Brands |
| MillerKnoll vs. Bassett Furniture Industries | MillerKnoll vs. Ethan Allen Interiors | MillerKnoll vs. Natuzzi SpA | MillerKnoll vs. Flexsteel Industries |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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