Correlation Between Proficient Auto and UTime

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

Diversification Opportunities for Proficient Auto and UTime

0.17

Correlation Coefficient

Proficient Auto  UTime

Average diversification

The 3 months correlation between Proficient and UTime is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and UTime Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTime Limited 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 UTime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTime Limited has no effect on the direction of Proficient Auto i.e., Proficient Auto and UTime go up and down completely randomly.

Pair Corralation between Proficient Auto and UTime

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the UTime. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 4.02 times less risky than UTime. The stock trades about -0.04 of its potential returns per unit of risk. The UTime Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,500  in UTime Limited on October 23, 2024 and sell it today you would lose (2,470) from holding UTime Limited or give up 98.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	35.63%
Values	Daily Returns

Proficient Auto Logistics,  vs.  UTime Limited

Proficient Auto Logi

Risk-Adjusted Performance

8 of 100

Modest

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

UTime Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UTime Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Proficient Auto and UTime

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

The idea behind Proficient Auto Logistics, and UTime Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.