Correlation Between Proficient Auto and JD Sports
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and JD Sports 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 JD Sports 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 JD Sports Fashion, you can compare the effects of market volatilities on Proficient Auto and JD Sports 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 JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and JD Sports.
Diversification Opportunities for Proficient Auto and JD Sports
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Proficient and JDSPY is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Proficient Auto i.e., Proficient Auto and JD Sports go up and down completely randomly.
Pair Corralation between Proficient Auto and JD Sports
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the JD Sports. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 1.04 times less risky than JD Sports. The stock trades about -0.05 of its potential returns per unit of risk. The JD Sports Fashion is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 213.00 in JD Sports Fashion on January 11, 2025 and sell it today you would lose (120.00) from holding JD Sports Fashion or give up 56.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 46.96% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. JD Sports Fashion
Performance |
| Timeline |
| Proficient Auto Logi |
| JD Sports Fashion |
Proficient Auto and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and JD Sports
The main advantage of trading using opposite Proficient Auto and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| Proficient Auto vs. SNDL Inc | Proficient Auto vs. Lindblad Expeditions Holdings | Proficient Auto vs. Saia Inc | Proficient Auto vs. Skillful Craftsman Education |
| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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