Correlation Between Miller Industries and Solid Power
Can any of the company-specific risk be diversified away by investing in both Miller Industries and Solid Power 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 Solid Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miller Industries and Solid Power, you can compare the effects of market volatilities on Miller Industries and Solid Power 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 Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and Solid Power.
Diversification Opportunities for Miller Industries and Solid Power
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Miller and Solid is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Miller Industries i.e., Miller Industries and Solid Power go up and down completely randomly.
Pair Corralation between Miller Industries and Solid Power
Considering the 90-day investment horizon Miller Industries is expected to generate 0.58 times more return on investment than Solid Power. However, Miller Industries is 1.71 times less risky than Solid Power. It trades about 0.12 of its potential returns per unit of risk. Solid Power is currently generating about 0.0 per unit of risk. If you would invest 6,846 in Miller Industries on September 14, 2024 and sell it today you would earn a total of 326.00 from holding Miller Industries or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miller Industries vs. Solid Power
Performance |
| Timeline |
| Miller Industries |
| Solid Power |
Miller Industries and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miller Industries and Solid Power
The main advantage of trading using opposite Miller Industries and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Industries position performs unexpectedly, Solid Power 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 Solid Power will offset losses from the drop in Solid Power'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 |
| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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