Correlation Between Douglas Emmett and Proficient Auto

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

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

Diversification Opportunities for Douglas Emmett and Proficient Auto

-0.55

Correlation Coefficient

Douglas Emmett  Proficient Auto

Excellent diversification

The 3 months correlation between Douglas and Proficient is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett i.e., Douglas Emmett and Proficient Auto go up and down completely randomly.

Pair Corralation between Douglas Emmett and Proficient Auto

Considering the 90-day investment horizon Douglas Emmett is expected to under-perform the Proficient Auto. But the stock apears to be less risky and, when comparing its historical volatility, Douglas Emmett is 2.42 times less risky than Proficient Auto. The stock trades about -0.06 of its potential returns per unit of risk. The Proficient Auto Logistics, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  765.00  in Proficient Auto Logistics, on December 20, 2024 and sell it today you would earn a total of  275.00  from holding Proficient Auto Logistics, or generate 35.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Douglas Emmett  vs.  Proficient Auto Logistics,

Douglas Emmett

Risk-Adjusted Performance

Very Weak

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Proficient Auto Logi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Douglas Emmett and Proficient Auto

The main advantage of trading using opposite Douglas Emmett and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Emmett 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 Douglas Emmett 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.