Correlation Between Proficient Auto and Zhibao Technology

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

Diversification Opportunities for Proficient Auto and Zhibao Technology

0.61

Correlation Coefficient

Proficient Auto  Zhibao Technology

Poor diversification

The 3 months correlation between Proficient and Zhibao is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Zhibao Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhibao Technology Class 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 Zhibao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhibao Technology Class has no effect on the direction of Proficient Auto i.e., Proficient Auto and Zhibao Technology go up and down completely randomly.

Pair Corralation between Proficient Auto and Zhibao Technology

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Zhibao Technology. But the stock apears to be less risky and, when comparing its historical volatility, Proficient Auto Logistics, is 1.26 times less risky than Zhibao Technology. The stock trades about -0.18 of its potential returns per unit of risk. The Zhibao Technology Class is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  390.00  in Zhibao Technology Class on September 15, 2024 and sell it today you would lose (165.00) from holding Zhibao Technology Class or give up 42.31% of portfolio value over 90 days.

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

Proficient Auto Logistics,  vs.  Zhibao Technology Class

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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Zhibao Technology Class

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Proficient Auto and Zhibao Technology

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

The idea behind Proficient Auto Logistics, and Zhibao Technology Class 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.