Correlation Between Church Dwight and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Church Dwight 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 Church Dwight and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and Proficient Auto Logistics,, you can compare the effects of market volatilities on Church Dwight 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 Church Dwight with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Proficient Auto.
Diversification Opportunities for Church Dwight and Proficient Auto
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Church and Proficient is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight 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 Church Dwight 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 Church Dwight 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 Church Dwight i.e., Church Dwight and Proficient Auto go up and down completely randomly.
Pair Corralation between Church Dwight and Proficient Auto
Considering the 90-day investment horizon Church Dwight is expected to generate 0.32 times more return on investment than Proficient Auto. However, Church Dwight is 3.1 times less risky than Proficient Auto. It trades about 0.06 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about -0.07 per unit of risk. If you would invest 7,998 in Church Dwight on September 12, 2024 and sell it today you would earn a total of 2,708 from holding Church Dwight or generate 33.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.3% |
| Values | Daily Returns |
Church Dwight vs. Proficient Auto Logistics,
Performance |
| Timeline |
| Church Dwight |
| Proficient Auto Logi |
Church Dwight and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and Proficient Auto
The main advantage of trading using opposite Church Dwight and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight 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.| Church Dwight vs. Victory Integrity Smallmid Cap | Church Dwight vs. Hilton Worldwide Holdings | Church Dwight vs. NVIDIA | Church Dwight vs. JPMorgan Chase Co |
| Proficient Auto vs. Church Dwight | Proficient Auto vs. Eastman Chemical | Proficient Auto vs. Arhaus Inc | Proficient Auto vs. NETGEAR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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