Correlation Between Hooker Furniture and MillerKnoll

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

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

Diversification Opportunities for Hooker Furniture and MillerKnoll

-0.54

Correlation Coefficient

Hooker Furniture  MillerKnoll

Excellent diversification

The 3 months correlation between Hooker and MillerKnoll is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and MillerKnoll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MillerKnoll and Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture i.e., Hooker Furniture and MillerKnoll go up and down completely randomly.

Pair Corralation between Hooker Furniture and MillerKnoll

Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.71 times more return on investment than MillerKnoll. However, Hooker Furniture is 1.71 times more volatile than MillerKnoll. It trades about 0.15 of its potential returns per unit of risk. MillerKnoll is currently generating about -0.03 per unit of risk. If you would invest  1,636  in Hooker Furniture on August 16, 2024 and sell it today you would earn a total of  178.00  from holding Hooker Furniture or generate 10.88% return on investment over 90 days.

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

Hooker Furniture  vs.  MillerKnoll

Hooker Furniture

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, Hooker Furniture unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hooker Furniture and MillerKnoll

The main advantage of trading using opposite Hooker Furniture and MillerKnoll positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hooker Furniture 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 Hooker Furniture 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.