Correlation Between Miller Industries and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Miller Industries and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Industries and Hesai Group American, you can compare the effects of market volatilities on Miller Industries and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and Hesai Group.
Diversification Opportunities for Miller Industries and Hesai Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Miller and Hesai is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Miller Industries i.e., Miller Industries and Hesai Group go up and down completely randomly.
Pair Corralation between Miller Industries and Hesai Group
Considering the 90-day investment horizon Miller Industries is expected to generate 0.89 times more return on investment than Hesai Group. However, Miller Industries is 1.13 times less risky than Hesai Group. It trades about 0.11 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.03 per unit of risk. If you would invest 6,268 in Miller Industries on August 24, 2024 and sell it today you would earn a total of 457.00 from holding Miller Industries or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miller Industries vs. Hesai Group American
Performance |
| Timeline |
| Miller Industries |
| Hesai Group American |
Miller Industries and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miller Industries and Hesai Group
The main advantage of trading using opposite Miller Industries and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Industries position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group'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 |
| Hesai Group vs. Garrett Motion | Hesai Group vs. Magna International | Hesai Group vs. Miller Industries | Hesai Group vs. Modine Manufacturing |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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