Correlation Between Ford and Herman Miller
Can any of the company-specific risk be diversified away by investing in both Ford and Herman Miller 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 Ford and Herman Miller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Herman Miller, you can compare the effects of market volatilities on Ford and Herman Miller 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 Ford with a short position of Herman Miller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Herman Miller.
Diversification Opportunities for Ford and Herman Miller
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Herman is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller and Ford 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 Ford Motor are associated (or correlated) with Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of Ford i.e., Ford and Herman Miller go up and down completely randomly.
Pair Corralation between Ford and Herman Miller
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Herman Miller. In addition to that, Ford is 1.04 times more volatile than Herman Miller. It trades about -0.01 of its total potential returns per unit of risk. Herman Miller is currently generating about 0.01 per unit of volatility. If you would invest 2,365 in Herman Miller on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Herman Miller or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Ford Motor vs. Herman Miller
Performance |
| Timeline |
| Ford Motor |
| Herman Miller |
Ford and Herman Miller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Herman Miller
The main advantage of trading using opposite Ford and Herman Miller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Herman Miller 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 Herman Miller will offset losses from the drop in Herman Miller's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Herman Miller vs. SERI INDUSTRIAL EO | Herman Miller vs. Meiko Electronics Co | Herman Miller vs. GALENA MINING LTD | Herman Miller vs. Zijin Mining Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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