Correlation Between Hongli Group and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Hongli Group 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 Hongli Group and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Proficient Auto Logistics,, you can compare the effects of market volatilities on Hongli Group 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 Hongli Group with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Proficient Auto.
Diversification Opportunities for Hongli Group and Proficient Auto
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongli and Proficient is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary 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 Hongli Group 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 Hongli Group Ordinary 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 Hongli Group i.e., Hongli Group and Proficient Auto go up and down completely randomly.
Pair Corralation between Hongli Group and Proficient Auto
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 1.02 times more return on investment than Proficient Auto. However, Hongli Group is 1.02 times more volatile than Proficient Auto Logistics,. It trades about -0.13 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about -0.17 per unit of risk. If you would invest 198.00 in Hongli Group Ordinary on September 3, 2024 and sell it today you would lose (73.00) from holding Hongli Group Ordinary or give up 36.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Proficient Auto Logistics,
Performance |
| Timeline |
| Hongli Group Ordinary |
| Proficient Auto Logi |
Hongli Group and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Proficient Auto
The main advantage of trading using opposite Hongli Group and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group 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.| Hongli Group vs. Proficient Auto Logistics, | Hongli Group vs. Capital Clean Energy | Hongli Group vs. Rackspace Technology | Hongli Group vs. Hafnia Limited |
| Proficient Auto vs. Hawkins | Proficient Auto vs. Hudson Technologies | Proficient Auto vs. Zhihu Inc ADR | Proficient Auto vs. Avient Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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