Correlation Between Proficient Auto and FedEx

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Can any of the company-specific risk be diversified away by investing in both Proficient Auto and FedEx 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 FedEx 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 FedEx, you can compare the effects of market volatilities on Proficient Auto and FedEx 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 FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and FedEx.

Diversification Opportunities for Proficient Auto and FedEx

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Proficient and FedEx is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx 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 FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of Proficient Auto i.e., Proficient Auto and FedEx go up and down completely randomly.

Pair Corralation between Proficient Auto and FedEx

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 2.35 times more return on investment than FedEx. However, Proficient Auto is 2.35 times more volatile than FedEx. It trades about 0.2 of its potential returns per unit of risk. FedEx is currently generating about -0.13 per unit of risk. If you would invest  883.00  in Proficient Auto Logistics, on November 5, 2024 and sell it today you would earn a total of  101.00  from holding Proficient Auto Logistics, or generate 11.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Proficient Auto Logistics,  vs.  FedEx

 Performance 
       Timeline  
Proficient Auto Logi 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.
FedEx 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FedEx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, FedEx is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Proficient Auto and FedEx Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Proficient Auto and FedEx

The main advantage of trading using opposite Proficient Auto and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, FedEx 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 FedEx will offset losses from the drop in FedEx's long position.
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The idea behind Proficient Auto Logistics, and FedEx pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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