Correlation Between Proficient Auto and Allegion PLC

Can any of the company-specific risk be diversified away by investing in both Proficient Auto and Allegion PLC 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 Allegion PLC 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 Allegion PLC, you can compare the effects of market volatilities on Proficient Auto and Allegion PLC 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 Allegion PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and Allegion PLC.

Diversification Opportunities for Proficient Auto and Allegion PLC

0.59

Correlation Coefficient

Proficient Auto  Allegion PLC

Very weak diversification

The 3 months correlation between Proficient and Allegion is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Allegion PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegion PLC 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 Allegion PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegion PLC has no effect on the direction of Proficient Auto i.e., Proficient Auto and Allegion PLC go up and down completely randomly.

Pair Corralation between Proficient Auto and Allegion PLC

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Allegion PLC. In addition to that, Proficient Auto is 4.71 times more volatile than Allegion PLC. It trades about -0.12 of its total potential returns per unit of risk. Allegion PLC is currently generating about -0.19 per unit of volatility. If you would invest  14,657  in Allegion PLC on October 9, 2024 and sell it today you would lose (1,745) from holding Allegion PLC or give up 11.91% of portfolio value over 90 days.

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

Proficient Auto Logistics,  vs.  Allegion PLC

Proficient Auto Logi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proficient Auto Logistics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Allegion PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegion PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Proficient Auto and Allegion PLC

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

The idea behind Proficient Auto Logistics, and Allegion PLC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.