Correlation Between Proficient Auto and PacifiCorp

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

Diversification Opportunities for Proficient Auto and PacifiCorp

-0.4

Correlation Coefficient

Proficient Auto  PacifiCorp

Very good diversification

The 3 months correlation between Proficient and PacifiCorp is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and PacifiCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacifiCorp 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 PacifiCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacifiCorp has no effect on the direction of Proficient Auto i.e., Proficient Auto and PacifiCorp go up and down completely randomly.

Pair Corralation between Proficient Auto and PacifiCorp

Considering the 90-day investment horizon Proficient Auto is expected to generate 10.16 times less return on investment than PacifiCorp. But when comparing it to its historical volatility, Proficient Auto Logistics, is 1.71 times less risky than PacifiCorp. It trades about 0.05 of its potential returns per unit of risk. PacifiCorp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  12,604  in PacifiCorp on October 12, 2024 and sell it today you would earn a total of  5,396  from holding PacifiCorp or generate 42.81% return on investment over 90 days.

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

Proficient Auto Logistics,  vs.  PacifiCorp

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 unsteady 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.

PacifiCorp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PacifiCorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, PacifiCorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Proficient Auto and PacifiCorp

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

The idea behind Proficient Auto Logistics, and PacifiCorp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.