Correlation Between Safe Pro and Custom Truck

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

By analyzing existing cross correlation between Safe Pro Group and Custom Truck One, you can compare the effects of market volatilities on Safe Pro and Custom Truck 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 Safe Pro with a short position of Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Pro and Custom Truck.

Diversification Opportunities for Safe Pro and Custom Truck

-0.32

Correlation Coefficient

Safe Pro  Custom Truck

Very good diversification

The 3 months correlation between Safe and Custom is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Safe Pro Group and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and Safe Pro 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 Safe Pro Group are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Safe Pro i.e., Safe Pro and Custom Truck go up and down completely randomly.

Pair Corralation between Safe Pro and Custom Truck

Given the investment horizon of 90 days Safe Pro Group is expected to generate 2.79 times more return on investment than Custom Truck. However, Safe Pro is 2.79 times more volatile than Custom Truck One. It trades about 0.03 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.02 per unit of risk. If you would invest  340.00  in Safe Pro Group on December 19, 2024 and sell it today you would lose (33.00) from holding Safe Pro Group or give up 9.71% of portfolio value over 90 days.

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

Safe Pro Group  vs.  Custom Truck One

Safe Pro Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Pro Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Safe Pro demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Custom Truck One

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Custom Truck is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Safe Pro and Custom Truck

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

The idea behind Safe Pro Group and Custom Truck One 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.