Correlation Between Proficient Auto and YHN Acquisition

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

Diversification Opportunities for Proficient Auto and YHN Acquisition

-0.38

Correlation Coefficient

Proficient Auto  YHN Acquisition

Very good diversification

The 3 months correlation between Proficient and YHN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and YHN Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YHN Acquisition I 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 YHN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YHN Acquisition I has no effect on the direction of Proficient Auto i.e., Proficient Auto and YHN Acquisition go up and down completely randomly.

Pair Corralation between Proficient Auto and YHN Acquisition

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the YHN Acquisition. In addition to that, Proficient Auto is 4.28 times more volatile than YHN Acquisition I. It trades about -0.02 of its total potential returns per unit of risk. YHN Acquisition I is currently generating about 0.02 per unit of volatility. If you would invest  1,009  in YHN Acquisition I on October 7, 2024 and sell it today you would earn a total of  6.00  from holding YHN Acquisition I or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.24%
Values	Daily Returns

Proficient Auto Logistics,  vs.  YHN Acquisition I

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 uncertain 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.

YHN Acquisition I

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, YHN Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Proficient Auto and YHN Acquisition

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

The idea behind Proficient Auto Logistics, and YHN Acquisition I 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..