Correlation Between Proficient Auto and Hongli Group
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and Hongli Group 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 Hongli Group 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 Hongli Group Ordinary, you can compare the effects of market volatilities on Proficient Auto and Hongli Group 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 Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and Hongli Group.
Diversification Opportunities for Proficient Auto and Hongli Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Proficient and Hongli is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary 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 Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of Proficient Auto i.e., Proficient Auto and Hongli Group go up and down completely randomly.
Pair Corralation between Proficient Auto and Hongli Group
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Hongli Group. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 1.23 times less risky than Hongli Group. The stock trades about -0.06 of its potential returns per unit of risk. The Hongli Group Ordinary is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 185.00 in Hongli Group Ordinary on September 3, 2024 and sell it today you would lose (60.00) from holding Hongli Group Ordinary or give up 32.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. Hongli Group Ordinary
Performance |
| Timeline |
| Proficient Auto Logi |
| Hongli Group Ordinary |
Proficient Auto and Hongli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and Hongli Group
The main advantage of trading using opposite Proficient Auto and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group's long position.| Proficient Auto vs. Hawkins | Proficient Auto vs. Hudson Technologies | Proficient Auto vs. Zhihu Inc ADR | Proficient Auto vs. Avient Corp |
| Hongli Group vs. Proficient Auto Logistics, | Hongli Group vs. Capital Clean Energy | Hongli Group vs. Rackspace Technology | Hongli Group vs. Hafnia Limited |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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