Correlation Between Ennis and Herman Miller

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

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

Diversification Opportunities for Ennis and Herman Miller

0.0

Correlation Coefficient

Ennis  Herman Miller

Pay attention - limited upside

The 3 months correlation between Ennis and Herman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ennis Inc and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller and Ennis 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 Ennis Inc are associated (or correlated) with Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of Ennis i.e., Ennis and Herman Miller go up and down completely randomly.

Pair Corralation between Ennis and Herman Miller

If you would invest  1,855  in Ennis Inc on January 25, 2024 and sell it today you would earn a total of  75.00  from holding Ennis Inc or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ennis Inc  vs.  Herman Miller

Ennis Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ennis Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Ennis is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Herman Miller

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ennis and Herman Miller

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

The idea behind Ennis Inc and Herman Miller 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.