Correlation Between Sea and Proficient Auto

Can any of the company-specific risk be diversified away by investing in both Sea and Proficient Auto 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 Sea and Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sea and Proficient Auto Logistics,, you can compare the effects of market volatilities on Sea and Proficient Auto 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 Sea with a short position of Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Proficient Auto.

Diversification Opportunities for Sea and Proficient Auto

0.54

Correlation Coefficient

Sea  Proficient Auto

Very weak diversification

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

Pair Corralation between Sea and Proficient Auto

Allowing for the 90-day total investment horizon Sea is expected to generate 0.52 times more return on investment than Proficient Auto. However, Sea is 1.91 times less risky than Proficient Auto. It trades about 0.14 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.07 per unit of risk. If you would invest  10,748  in Sea on December 28, 2024 and sell it today you would earn a total of  2,609  from holding Sea or generate 24.27% return on investment over 90 days.

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

Sea  vs.  Proficient Auto Logistics,

Sea

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sea and Proficient Auto

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

The idea behind Sea and Proficient Auto Logistics, 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.