Correlation Between MillerKnoll and McGrath RentCorp
Can any of the company-specific risk be diversified away by investing in both MillerKnoll and McGrath RentCorp 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 MillerKnoll and McGrath RentCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MillerKnoll and McGrath RentCorp, you can compare the effects of market volatilities on MillerKnoll and McGrath RentCorp 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 MillerKnoll with a short position of McGrath RentCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MillerKnoll and McGrath RentCorp.
Diversification Opportunities for MillerKnoll and McGrath RentCorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MillerKnoll and McGrath is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding MillerKnoll and McGrath RentCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McGrath RentCorp and MillerKnoll 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 MillerKnoll are associated (or correlated) with McGrath RentCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McGrath RentCorp has no effect on the direction of MillerKnoll i.e., MillerKnoll and McGrath RentCorp go up and down completely randomly.
Pair Corralation between MillerKnoll and McGrath RentCorp
Given the investment horizon of 90 days MillerKnoll is expected to generate 3.57 times less return on investment than McGrath RentCorp. But when comparing it to its historical volatility, MillerKnoll is 1.11 times less risky than McGrath RentCorp. It trades about 0.04 of its potential returns per unit of risk. McGrath RentCorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,937 in McGrath RentCorp on August 26, 2024 and sell it today you would earn a total of 1,153 from holding McGrath RentCorp or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MillerKnoll vs. McGrath RentCorp
Performance |
| Timeline |
| MillerKnoll |
| McGrath RentCorp |
MillerKnoll and McGrath RentCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MillerKnoll and McGrath RentCorp
The main advantage of trading using opposite MillerKnoll and McGrath RentCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MillerKnoll position performs unexpectedly, McGrath RentCorp 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 McGrath RentCorp will offset losses from the drop in McGrath RentCorp's long position.| MillerKnoll vs. Bassett Furniture Industries | MillerKnoll vs. Ethan Allen Interiors | MillerKnoll vs. Natuzzi SpA | MillerKnoll vs. Flexsteel Industries |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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