Correlation Between MYT Netherlands and Proficient Auto

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

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

Diversification Opportunities for MYT Netherlands and Proficient Auto

0.19

Correlation Coefficient

MYT Netherlands  Proficient Auto

Average diversification

The 3 months correlation between MYT and Proficient is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent 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 MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Proficient Auto go up and down completely randomly.

Pair Corralation between MYT Netherlands and Proficient Auto

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.39 times more return on investment than Proficient Auto. However, MYT Netherlands is 1.39 times more volatile than Proficient Auto Logistics,. It trades about 0.44 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.55 per unit of risk. If you would invest  687.00  in MYT Netherlands Parent on October 23, 2024 and sell it today you would earn a total of  252.00  from holding MYT Netherlands Parent or generate 36.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MYT Netherlands Parent  vs.  Proficient Auto Logistics,

MYT Netherlands Parent

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

Proficient Auto Logi

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 8 (%) 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 MYT Netherlands and Proficient Auto

The main advantage of trading using opposite MYT Netherlands and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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 MYT Netherlands Parent 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.