Correlation Between Microvast Holdings and Miller Industries

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

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

Diversification Opportunities for Microvast Holdings and Miller Industries

0.8

Correlation Coefficient

Microvast Holdings  Miller Industries

Very poor diversification

The 3 months correlation between Microvast and Miller is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Miller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Industries and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Miller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Industries has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Miller Industries go up and down completely randomly.

Pair Corralation between Microvast Holdings and Miller Industries

Assuming the 90 days horizon Microvast Holdings is expected to under-perform the Miller Industries. In addition to that, Microvast Holdings is 3.97 times more volatile than Miller Industries. It trades about -0.1 of its total potential returns per unit of risk. Miller Industries is currently generating about -0.24 per unit of volatility. If you would invest  6,299  in Miller Industries on January 10, 2025 and sell it today you would lose (2,263) from holding Miller Industries or give up 35.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Microvast Holdings  vs.  Miller Industries

Microvast Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microvast Holdings 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 basic indicators remain fairly stable which may send shares a bit higher in May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Miller Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Miller Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Microvast Holdings and Miller Industries

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

The idea behind Microvast Holdings and Miller Industries 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 Commodity Directory module to find actively traded commodities issued by global exchanges.