Correlation Between Alta Equipment and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Alta Equipment and Proficient Auto 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 Alta Equipment and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alta Equipment Group and Proficient Auto Logistics,, you can compare the effects of market volatilities on Alta Equipment and Proficient Auto 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 Alta Equipment with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Proficient Auto.
Diversification Opportunities for Alta Equipment and Proficient Auto
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alta and Proficient is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi and Alta Equipment 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 Alta Equipment Group are associated (or correlated) with Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Alta Equipment i.e., Alta Equipment and Proficient Auto go up and down completely randomly.
Pair Corralation between Alta Equipment and Proficient Auto
Given the investment horizon of 90 days Alta Equipment is expected to generate 1.72 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, Alta Equipment Group is 1.05 times less risky than Proficient Auto. It trades about 0.18 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 812.00 in Proficient Auto Logistics, on November 3, 2024 and sell it today you would earn a total of 172.00 from holding Proficient Auto Logistics, or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Proficient Auto Logistics,
Performance |
| Timeline |
| Alta Equipment Group |
| Proficient Auto Logi |
Alta Equipment and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Proficient Auto
The main advantage of trading using opposite Alta Equipment and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto's long position.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| Proficient Auto vs. Amkor Technology | Proficient Auto vs. Kaiser Aluminum | Proficient Auto vs. Chemours Co | Proficient Auto vs. Jabil Circuit |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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