Correlation Between MillerKnoll and Crown Crafts

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

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

Diversification Opportunities for MillerKnoll and Crown Crafts

-0.54

Correlation Coefficient

MillerKnoll  Crown Crafts

Excellent diversification

The 3 months correlation between MillerKnoll and Crown is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MillerKnoll and Crown Crafts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Crafts and MillerKnoll 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 MillerKnoll are associated (or correlated) with Crown Crafts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Crafts has no effect on the direction of MillerKnoll i.e., MillerKnoll and Crown Crafts go up and down completely randomly.

Pair Corralation between MillerKnoll and Crown Crafts

Given the investment horizon of 90 days MillerKnoll is expected to generate 1.22 times more return on investment than Crown Crafts. However, MillerKnoll is 1.22 times more volatile than Crown Crafts. It trades about 0.08 of its potential returns per unit of risk. Crown Crafts is currently generating about -0.02 per unit of risk. If you would invest  1,614  in MillerKnoll on May 5, 2025 and sell it today you would earn a total of  207.00  from holding MillerKnoll or generate 12.83% return on investment over 90 days.

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

MillerKnoll  vs.  Crown Crafts

MillerKnoll

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MillerKnoll are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, MillerKnoll displayed solid returns over the last few months and may actually be approaching a breakup point.

Crown Crafts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Crafts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Crown Crafts is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MillerKnoll and Crown Crafts

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

The idea behind MillerKnoll and Crown Crafts 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.