Correlation Between Proficient Auto and Regions Financial

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

Diversification Opportunities for Proficient Auto and Regions Financial

0.22

Correlation Coefficient

Proficient Auto  Regions Financial

Modest diversification

The 3 months correlation between Proficient and Regions is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Proficient Auto i.e., Proficient Auto and Regions Financial go up and down completely randomly.

Pair Corralation between Proficient Auto and Regions Financial

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 2.51 times more return on investment than Regions Financial. However, Proficient Auto is 2.51 times more volatile than Regions Financial. It trades about 0.0 of its potential returns per unit of risk. Regions Financial is currently generating about -0.1 per unit of risk. If you would invest  1,023  in Proficient Auto Logistics, on October 26, 2024 and sell it today you would lose (20.00) from holding Proficient Auto Logistics, or give up 1.96% of portfolio value over 90 days.

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

Proficient Auto Logistics,  vs.  Regions Financial

Proficient Auto Logi

Risk-Adjusted Performance

8 of 100

OK

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 unfluctuating basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Regions Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regions Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Regions Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Proficient Auto and Regions Financial

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

The idea behind Proficient Auto Logistics, and Regions Financial 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 Global Correlations module to find global opportunities by holding instruments from different markets.