Correlation Between Barnes and Proficient Auto

Can any of the company-specific risk be diversified away by investing in both Barnes and Proficient Auto 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 Barnes and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barnes Group and Proficient Auto Logistics,, you can compare the effects of market volatilities on Barnes and Proficient Auto 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 Barnes with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and Proficient Auto.

Diversification Opportunities for Barnes and Proficient Auto

-0.14

Correlation Coefficient

Barnes  Proficient Auto

Good diversification

The 3 months correlation between Barnes and Proficient is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi and Barnes 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 Barnes Group are associated (or correlated) with Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Barnes i.e., Barnes and Proficient Auto go up and down completely randomly.

Pair Corralation between Barnes and Proficient Auto

Taking into account the 90-day investment horizon Barnes is expected to generate 11.54 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, Barnes Group is 70.78 times less risky than Proficient Auto. It trades about 0.34 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  787.00  in Proficient Auto Logistics, on December 30, 2024 and sell it today you would earn a total of  86.00  from holding Proficient Auto Logistics, or generate 10.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.03%
Values	Daily Returns

Barnes Group  vs.  Proficient Auto Logistics,

Barnes Group

Risk-Adjusted Performance

Strong

Over the last 90 days Barnes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Barnes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Proficient Auto Logi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barnes and Proficient Auto

The main advantage of trading using opposite Barnes and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto's long position.

The idea behind Barnes Group and Proficient Auto Logistics, 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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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.