Correlation Between Miller Industries and Automotive Portfolio

Can any of the company-specific risk be diversified away by investing in both Miller Industries and Automotive Portfolio 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 Automotive Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Miller Industries and Automotive Portfolio Automotive, you can compare the effects of market volatilities on Miller Industries and Automotive Portfolio 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 Automotive Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miller Industries and Automotive Portfolio.

Diversification Opportunities for Miller Industries and Automotive Portfolio

0.91

Correlation Coefficient

Miller Industries  Automotive Portfolio

Almost no diversification

The 3 months correlation between Miller and Automotive is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Miller Industries and Automotive Portfolio Automotiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Portfolio 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 Automotive Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Portfolio has no effect on the direction of Miller Industries i.e., Miller Industries and Automotive Portfolio go up and down completely randomly.

Pair Corralation between Miller Industries and Automotive Portfolio

Considering the 90-day investment horizon Miller Industries is expected to under-perform the Automotive Portfolio. In addition to that, Miller Industries is 1.22 times more volatile than Automotive Portfolio Automotive. It trades about 0.0 of its total potential returns per unit of risk. Automotive Portfolio Automotive is currently generating about 0.04 per unit of volatility. If you would invest  5,410  in Automotive Portfolio Automotive on March 19, 2025 and sell it today you would earn a total of  173.00  from holding Automotive Portfolio Automotive or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Miller Industries  vs.  Automotive Portfolio Automotiv

Miller Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Miller Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Miller Industries is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Automotive Portfolio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Automotive Portfolio Automotive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Automotive Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Miller Industries and Automotive Portfolio

The main advantage of trading using opposite Miller Industries and Automotive Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miller Industries position performs unexpectedly, Automotive Portfolio 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 Automotive Portfolio will offset losses from the drop in Automotive Portfolio's long position.

The idea behind Miller Industries and Automotive Portfolio Automotive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..