Correlation Between Herman Miller and Ennis

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

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

Diversification Opportunities for Herman Miller and Ennis

0.0

Correlation Coefficient

Herman Miller  Ennis

Pay attention - limited upside

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

Pair Corralation between Herman Miller and Ennis

If you would invest  1,598  in Ennis Inc on January 18, 2024 and sell it today you would earn a total of  309.00  from holding Ennis Inc or generate 19.34% return on investment over 90 days.

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

Herman Miller  vs.  Ennis Inc

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Herman Miller and Ennis

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

The idea behind Herman Miller and Ennis Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.