Correlation Between Miller Industries and Cooper Stnd
Can any of the company-specific risk be diversified away by investing in both Miller Industries and Cooper Stnd 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 Miller Industries and Cooper Stnd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Industries and Cooper Stnd, you can compare the effects of market volatilities on Miller Industries and Cooper Stnd 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 Miller Industries with a short position of Cooper Stnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and Cooper Stnd.
Diversification Opportunities for Miller Industries and Cooper Stnd
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miller and Cooper is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Miller Industries 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 Miller Industries are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Miller Industries i.e., Miller Industries and Cooper Stnd go up and down completely randomly.
Pair Corralation between Miller Industries and Cooper Stnd
Considering the 90-day investment horizon Miller Industries is expected to generate 0.71 times more return on investment than Cooper Stnd. However, Miller Industries is 1.4 times less risky than Cooper Stnd. It trades about 0.14 of its potential returns per unit of risk. Cooper Stnd is currently generating about 0.08 per unit of risk. If you would invest 6,767 in Miller Industries on August 30, 2024 and sell it today you would earn a total of 705.00 from holding Miller Industries or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miller Industries vs. Cooper Stnd
Performance |
| Timeline |
| Miller Industries |
| Cooper Stnd |
Miller Industries and Cooper Stnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miller Industries and Cooper Stnd
The main advantage of trading using opposite Miller Industries and Cooper Stnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Industries position performs unexpectedly, Cooper Stnd 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 Cooper Stnd will offset losses from the drop in Cooper Stnd's long position.| Miller Industries vs. Dorman Products | Miller Industries vs. Standard Motor Products | Miller Industries vs. Motorcar Parts of | Miller Industries vs. Douglas Dynamics |
| Cooper Stnd vs. Dorman Products | Cooper Stnd vs. Monro Muffler Brake | Cooper Stnd vs. Standard Motor Products | Cooper Stnd vs. Stoneridge |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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