Correlation Between Proficient Auto and CERo Therapeutics

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

Diversification Opportunities for Proficient Auto and CERo Therapeutics

-0.1

Correlation Coefficient

Proficient Auto  CERo Therapeutics

Good diversification

The 3 months correlation between Proficient and CERo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Proficient Auto i.e., Proficient Auto and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Proficient Auto and CERo Therapeutics

Considering the 90-day investment horizon Proficient Auto is expected to generate 73.44 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Proficient Auto Logistics, is 10.31 times less risky than CERo Therapeutics. It trades about 0.02 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.71  in CERo Therapeutics Holdings on October 6, 2024 and sell it today you would earn a total of  0.19  from holding CERo Therapeutics Holdings or generate 26.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Proficient Auto Logistics,  vs.  CERo Therapeutics Holdings

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 fragile 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.

CERo Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, CERo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Proficient Auto and CERo Therapeutics

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

The idea behind Proficient Auto Logistics, and CERo Therapeutics Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.