Correlation Between Proficient Auto and Sellas Life

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

Diversification Opportunities for Proficient Auto and Sellas Life

0.31

Correlation Coefficient

Proficient Auto  Sellas Life

Weak diversification

The 3 months correlation between Proficient and Sellas is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Proficient Auto i.e., Proficient Auto and Sellas Life go up and down completely randomly.

Pair Corralation between Proficient Auto and Sellas Life

Considering the 90-day investment horizon Proficient Auto is expected to generate 1.35 times less return on investment than Sellas Life. But when comparing it to its historical volatility, Proficient Auto Logistics, is 1.39 times less risky than Sellas Life. It trades about 0.07 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Sellas Life Sciences on December 29, 2024 and sell it today you would earn a total of  17.00  from holding Sellas Life Sciences or generate 17.17% return on investment over 90 days.

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

Proficient Auto Logistics,  vs.  Sellas Life Sciences

Proficient Auto Logi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sellas Life Sciences

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sellas Life Sciences are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Sellas Life unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Proficient Auto and Sellas Life

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

The idea behind Proficient Auto Logistics, and Sellas Life Sciences 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.