Correlation Between Proficient Auto and Emerson Electric
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and Emerson Electric 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 Emerson Electric 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 Emerson Electric, you can compare the effects of market volatilities on Proficient Auto and Emerson Electric 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 Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and Emerson Electric.
Diversification Opportunities for Proficient Auto and Emerson Electric
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Proficient and Emerson is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric 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 Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Proficient Auto i.e., Proficient Auto and Emerson Electric go up and down completely randomly.
Pair Corralation between Proficient Auto and Emerson Electric
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 2.8 times more return on investment than Emerson Electric. However, Proficient Auto is 2.8 times more volatile than Emerson Electric. It trades about 0.17 of its potential returns per unit of risk. Emerson Electric is currently generating about -0.36 per unit of risk. If you would invest 915.00 in Proficient Auto Logistics, on October 16, 2024 and sell it today you would earn a total of 102.00 from holding Proficient Auto Logistics, or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. Emerson Electric
Performance |
| Timeline |
| Proficient Auto Logi |
| Emerson Electric |
Proficient Auto and Emerson Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and Emerson Electric
The main advantage of trading using opposite Proficient Auto and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, Emerson Electric 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 Emerson Electric will offset losses from the drop in Emerson Electric's long position.| Proficient Auto vs. Treasury Wine Estates | Proficient Auto vs. Brandywine Realty Trust | Proficient Auto vs. Kingdee International Software | Proficient Auto vs. Keurig Dr Pepper |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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