Correlation Between Proficient Auto and EMCOR
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and EMCOR 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 EMCOR 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 EMCOR Group, you can compare the effects of market volatilities on Proficient Auto and EMCOR 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 EMCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and EMCOR.
Diversification Opportunities for Proficient Auto and EMCOR
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Proficient and EMCOR is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and EMCOR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCOR Group 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 EMCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCOR Group has no effect on the direction of Proficient Auto i.e., Proficient Auto and EMCOR go up and down completely randomly.
Pair Corralation between Proficient Auto and EMCOR
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 1.54 times more return on investment than EMCOR. However, Proficient Auto is 1.54 times more volatile than EMCOR Group. It trades about 0.29 of its potential returns per unit of risk. EMCOR Group is currently generating about 0.38 per unit of risk. If you would invest 843.00 in Proficient Auto Logistics, on August 28, 2024 and sell it today you would earn a total of 180.00 from holding Proficient Auto Logistics, or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. EMCOR Group
Performance |
| Timeline |
| Proficient Auto Logi |
| EMCOR Group |
Proficient Auto and EMCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and EMCOR
The main advantage of trading using opposite Proficient Auto and EMCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, EMCOR 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 EMCOR will offset losses from the drop in EMCOR's long position.| Proficient Auto vs. Air Transport Services | Proficient Auto vs. Mesa Air Group | Proficient Auto vs. Emerson Radio | Proficient Auto vs. Here Media |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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