Correlation Between Proficient Auto and SGS SA

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

Diversification Opportunities for Proficient Auto and SGS SA

-0.24

Correlation Coefficient

Proficient Auto  SGS SA

Very good diversification

The 3 months correlation between Proficient and SGS is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Proficient Auto i.e., Proficient Auto and SGS SA go up and down completely randomly.

Pair Corralation between Proficient Auto and SGS SA

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 2.11 times more return on investment than SGS SA. However, Proficient Auto is 2.11 times more volatile than SGS SA. It trades about 0.1 of its potential returns per unit of risk. SGS SA is currently generating about -0.01 per unit of risk. If you would invest  768.00  in Proficient Auto Logistics, on December 22, 2024 and sell it today you would earn a total of  221.00  from holding Proficient Auto Logistics, or generate 28.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Proficient Auto Logistics,  vs.  SGS SA

Proficient Auto Logi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

SGS SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SGS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SGS SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Proficient Auto and SGS SA

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

The idea behind Proficient Auto Logistics, and SGS SA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.