Correlation Between Hamilton Beach and MillerKnoll

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

By analyzing existing cross correlation between Hamilton Beach Brands and MillerKnoll, you can compare the effects of market volatilities on Hamilton Beach and MillerKnoll 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 Hamilton Beach with a short position of MillerKnoll. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Beach and MillerKnoll.

Diversification Opportunities for Hamilton Beach and MillerKnoll

0.13

Correlation Coefficient

Hamilton Beach  MillerKnoll

Average diversification

The 3 months correlation between Hamilton and MillerKnoll is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Beach Brands and MillerKnoll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MillerKnoll and Hamilton Beach 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 Hamilton Beach Brands are associated (or correlated) with MillerKnoll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MillerKnoll has no effect on the direction of Hamilton Beach i.e., Hamilton Beach and MillerKnoll go up and down completely randomly.

Pair Corralation between Hamilton Beach and MillerKnoll

Considering the 90-day investment horizon Hamilton Beach Brands is expected to under-perform the MillerKnoll. In addition to that, Hamilton Beach is 1.54 times more volatile than MillerKnoll. It trades about -0.1 of its total potential returns per unit of risk. MillerKnoll is currently generating about -0.04 per unit of volatility. If you would invest  2,788  in MillerKnoll on September 5, 2024 and sell it today you would lose (244.00) from holding MillerKnoll or give up 8.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Hamilton Beach Brands  vs.  MillerKnoll

Hamilton Beach Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hamilton Beach Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MillerKnoll

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MillerKnoll has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Hamilton Beach and MillerKnoll

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

The idea behind Hamilton Beach Brands and MillerKnoll 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.