Correlation Between Proficient Auto and Stepan
Can any of the company-specific risk be diversified away by investing in both Proficient Auto and Stepan 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 Stepan 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 Stepan Company, you can compare the effects of market volatilities on Proficient Auto and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and Stepan.
Diversification Opportunities for Proficient Auto and Stepan
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Proficient and Stepan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Proficient Auto i.e., Proficient Auto and Stepan go up and down completely randomly.
Pair Corralation between Proficient Auto and Stepan
Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Stepan. In addition to that, Proficient Auto is 1.98 times more volatile than Stepan Company. It trades about -0.08 of its total potential returns per unit of risk. Stepan Company is currently generating about -0.03 per unit of volatility. If you would invest 8,331 in Stepan Company on September 13, 2024 and sell it today you would lose (804.50) from holding Stepan Company or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proficient Auto Logistics, vs. Stepan Company
Performance |
| Timeline |
| Proficient Auto Logi |
| Stepan Company |
Proficient Auto and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proficient Auto and Stepan
The main advantage of trading using opposite Proficient Auto and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proficient Auto position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Proficient Auto vs. Expeditors International of | Proficient Auto vs. FedEx | Proficient Auto vs. GXO Logistics | Proficient Auto vs. Forward Air |
| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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