Correlation Between Proficient Auto and Cirmaker Technology

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

Diversification Opportunities for Proficient Auto and Cirmaker Technology

0.37

Correlation Coefficient

Proficient Auto  Cirmaker Technology

Weak diversification

The 3 months correlation between Proficient and Cirmaker is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology 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 Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of Proficient Auto i.e., Proficient Auto and Cirmaker Technology go up and down completely randomly.

Pair Corralation between Proficient Auto and Cirmaker Technology

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Cirmaker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 13.0 times less risky than Cirmaker Technology. The stock trades about -0.04 of its potential returns per unit of risk. The Cirmaker Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3.30  in Cirmaker Technology on October 23, 2024 and sell it today you would earn a total of  2.10  from holding Cirmaker Technology or generate 63.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.63%
Values	Daily Returns

Proficient Auto Logistics,  vs.  Cirmaker Technology

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.

Cirmaker Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cirmaker Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking signals, Cirmaker Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Proficient Auto and Cirmaker Technology

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

The idea behind Proficient Auto Logistics, and Cirmaker Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.