Correlation Between John B and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Proficient Auto Logistics,, you can compare the effects of market volatilities on John B 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 John B with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Proficient Auto.
Diversification Opportunities for John B and Proficient Auto
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Proficient is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo 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 John B 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 John B Sanfilippo 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 John B i.e., John B and Proficient Auto go up and down completely randomly.
Pair Corralation between John B and Proficient Auto
Given the investment horizon of 90 days John B Sanfilippo is expected to generate 0.44 times more return on investment than Proficient Auto. However, John B Sanfilippo is 2.27 times less risky than Proficient Auto. It trades about 0.07 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.03 per unit of risk. If you would invest 8,635 in John B Sanfilippo on October 30, 2024 and sell it today you would earn a total of 283.00 from holding John B Sanfilippo or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. Proficient Auto Logistics,
Performance |
| Timeline |
| John B Sanfilippo |
| Proficient Auto Logi |
John B and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and Proficient Auto
The main advantage of trading using opposite John B and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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.| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. Seneca Foods Corp |
| Proficient Auto vs. Take Two Interactive Software | Proficient Auto vs. SohuCom | Proficient Auto vs. Playtika Holding Corp | Proficient Auto vs. Roblox 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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