Correlation Between MasterBrand and MillerKnoll
Can any of the company-specific risk be diversified away by investing in both MasterBrand 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 MasterBrand and MillerKnoll into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasterBrand and MillerKnoll, you can compare the effects of market volatilities on MasterBrand 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 MasterBrand with a short position of MillerKnoll. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasterBrand and MillerKnoll.
Diversification Opportunities for MasterBrand and MillerKnoll
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MasterBrand and MillerKnoll is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MasterBrand and MillerKnoll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MillerKnoll and MasterBrand 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 MasterBrand 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 MasterBrand i.e., MasterBrand and MillerKnoll go up and down completely randomly.
Pair Corralation between MasterBrand and MillerKnoll
Considering the 90-day investment horizon MasterBrand is expected to generate 1.36 times less return on investment than MillerKnoll. But when comparing it to its historical volatility, MasterBrand is 1.28 times less risky than MillerKnoll. It trades about 0.07 of its potential returns per unit of risk. MillerKnoll is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,331 in MillerKnoll on August 27, 2024 and sell it today you would earn a total of 1,122 from holding MillerKnoll or generate 84.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MasterBrand vs. MillerKnoll
Performance |
| Timeline |
| MasterBrand |
| MillerKnoll |
MasterBrand and MillerKnoll Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasterBrand and MillerKnoll
The main advantage of trading using opposite MasterBrand and MillerKnoll positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasterBrand 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.| MasterBrand vs. Bassett Furniture Industries | MasterBrand vs. Ethan Allen Interiors | MasterBrand vs. Natuzzi SpA | MasterBrand vs. Flexsteel Industries |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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