Correlation Between Proficient Auto and CROWN

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

Diversification Opportunities for Proficient Auto and CROWN

0.54

Correlation Coefficient

Proficient Auto  CROWN

Very weak diversification

The 3 months correlation between Proficient and CROWN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and CROWN CASTLE INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTL 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTL has no effect on the direction of Proficient Auto i.e., Proficient Auto and CROWN go up and down completely randomly.

Pair Corralation between Proficient Auto and CROWN

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the CROWN. In addition to that, Proficient Auto is 7.3 times more volatile than CROWN CASTLE INTL. It trades about -0.09 of its total potential returns per unit of risk. CROWN CASTLE INTL is currently generating about 0.03 per unit of volatility. If you would invest  9,248  in CROWN CASTLE INTL on October 4, 2024 and sell it today you would earn a total of  390.00  from holding CROWN CASTLE INTL or generate 4.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	50.3%
Values	Daily Returns

Proficient Auto Logistics,  vs.  CROWN CASTLE INTL

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.

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Proficient Auto and CROWN

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

The idea behind Proficient Auto Logistics, and CROWN CASTLE INTL 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.