Correlation Between Virco Manufacturing and Miller Industries

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

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

Diversification Opportunities for Virco Manufacturing and Miller Industries

0.13

Correlation Coefficient

Virco Manufacturing  Miller Industries

Average diversification

The 3 months correlation between Virco and Miller is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing and Miller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Industries and Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing i.e., Virco Manufacturing and Miller Industries go up and down completely randomly.

Pair Corralation between Virco Manufacturing and Miller Industries

Given the investment horizon of 90 days Virco Manufacturing is expected to under-perform the Miller Industries. In addition to that, Virco Manufacturing is 1.54 times more volatile than Miller Industries. It trades about -0.04 of its total potential returns per unit of risk. Miller Industries is currently generating about -0.04 per unit of volatility. If you would invest  4,226  in Miller Industries on May 4, 2025 and sell it today you would lose (207.00) from holding Miller Industries or give up 4.9% of portfolio value over 90 days.

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

Virco Manufacturing  vs.  Miller Industries

Virco Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virco Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 relatively invariable essential indicators, Miller Industries is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Virco Manufacturing and Miller Industries

The main advantage of trading using opposite Virco Manufacturing and Miller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing 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 Virco Manufacturing 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.