Correlation Between Xpel and Miller Industries
Can any of the company-specific risk be diversified away by investing in both Xpel and Miller Industries 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 Xpel and Miller Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xpel Inc and Miller Industries, you can compare the effects of market volatilities on Xpel and Miller Industries 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 Xpel with a short position of Miller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xpel and Miller Industries.
Diversification Opportunities for Xpel and Miller Industries
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xpel and Miller is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xpel Inc and Miller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Industries and Xpel 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 Xpel Inc are associated (or correlated) with Miller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Industries has no effect on the direction of Xpel i.e., Xpel and Miller Industries go up and down completely randomly.
Pair Corralation between Xpel and Miller Industries
Given the investment horizon of 90 days Xpel Inc is expected to generate 1.32 times more return on investment than Miller Industries. However, Xpel is 1.32 times more volatile than Miller Industries. It trades about -0.02 of its potential returns per unit of risk. Miller Industries is currently generating about -0.22 per unit of risk. If you would invest 4,213 in Xpel Inc on November 18, 2024 and sell it today you would lose (51.00) from holding Xpel Inc or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xpel Inc vs. Miller Industries
Performance |
| Timeline |
| Xpel Inc |
| Miller Industries |
Xpel and Miller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xpel and Miller Industries
The main advantage of trading using opposite Xpel and Miller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpel position performs unexpectedly, Miller Industries 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 Miller Industries will offset losses from the drop in Miller Industries' long position.| Xpel vs. Dorman Products | Xpel vs. Standard Motor Products | Xpel vs. Motorcar Parts of | Xpel vs. Stoneridge |
| Miller Industries vs. Dorman Products | Miller Industries vs. Standard Motor Products | Miller Industries vs. Motorcar Parts of | Miller Industries vs. Douglas Dynamics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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