Correlation Between Miller Market and Absolute Capital

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

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

Diversification Opportunities for Miller Market and Absolute Capital

0.0

Correlation Coefficient

Miller Market  Absolute Capital

Pay attention - limited upside

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

Pair Corralation between Miller Market and Absolute Capital

If you would invest  1,096  in Absolute Capital Defender on May 3, 2025 and sell it today you would earn a total of  68.00  from holding Absolute Capital Defender or generate 6.2% return on investment over 90 days.

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

Miller Market Neutral  vs.  Absolute Capital Defender

Miller Market Neutral

Risk-Adjusted Performance

Strong

Over the last 90 days Miller Market Neutral has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Miller Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Absolute Capital Defender

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Absolute Capital Defender are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Absolute Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Miller Market and Absolute Capital

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

The idea behind Miller Market Neutral and Absolute Capital Defender 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.