Correlation Between Herman Miller and Knoll

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

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

Diversification Opportunities for Herman Miller and Knoll

0.0

Correlation Coefficient

Herman Miller  Knoll

Pay attention - limited upside

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

Pair Corralation between Herman Miller and Knoll

If you would invest (100.00) in Knoll Inc on January 26, 2024 and sell it today you would earn a total of  100.00  from holding Knoll Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Herman Miller  vs.  Knoll 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 current stock price agitation, may contribute to short-term losses for the retail investors.

Knoll Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Knoll Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Knoll is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Herman Miller and Knoll

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

The idea behind Herman Miller and Knoll 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.