Correlation Between Proficient Auto and UNITEDHEALTH

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

Diversification Opportunities for Proficient Auto and UNITEDHEALTH

0.35

Correlation Coefficient

Proficient Auto  UNITEDHEALTH

Weak diversification

The 3 months correlation between Proficient and UNITEDHEALTH is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC 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 UNITEDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITEDHEALTH GROUP INC has no effect on the direction of Proficient Auto i.e., Proficient Auto and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Proficient Auto and UNITEDHEALTH

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 6.16 times more return on investment than UNITEDHEALTH. However, Proficient Auto is 6.16 times more volatile than UNITEDHEALTH GROUP INC. It trades about 0.08 of its potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about 0.09 per unit of risk. If you would invest  803.00  in Proficient Auto Logistics, on December 27, 2024 and sell it today you would earn a total of  172.00  from holding Proficient Auto Logistics, or generate 21.42% 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.  UNITEDHEALTH GROUP INC

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 6 (%) 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.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNITEDHEALTH GROUP INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Proficient Auto and UNITEDHEALTH

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

The idea behind Proficient Auto Logistics, and UNITEDHEALTH GROUP INC 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.