Correlation Between Proficient Auto and China State
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and China State 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 Proficient Auto and China State into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proficient Auto Logistics, and China State Construction, you can compare the effects of market volatilities on Proficient Auto and China State 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 Proficient Auto with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and China State.
Diversification Opportunities for Proficient Auto and China State
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Proficient and China is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Proficient Auto 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 Proficient Auto Logistics, are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Proficient Auto i.e., Proficient Auto and China State go up and down completely randomly.
Pair Corralation between Proficient Auto and China State
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the China State. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 1.23 times less risky than China State. The stock trades about -0.07 of its potential returns per unit of risk. The China State Construction is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 105.00 in China State Construction on September 14, 2024 and sell it today you would earn a total of 0.00 from holding China State Construction or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.79% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. China State Construction
Performance |
| Timeline |
| Proficient Auto Logi |
| China State Construction |
Proficient Auto and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and China State
The main advantage of trading using opposite Proficient Auto and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.| Proficient Auto vs. Apogee Enterprises | Proficient Auto vs. Saia Inc | Proficient Auto vs. Yuexiu Transport Infrastructure | Proficient Auto vs. JD Sports Fashion |
| China State vs. Sun Country Airlines | China State vs. Proficient Auto Logistics, | China State vs. Shake Shack | China State vs. The Cheesecake Factory |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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