Correlation Between Proficient Auto and Cumulus Media

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

Diversification Opportunities for Proficient Auto and Cumulus Media

0.75

Correlation Coefficient

Proficient Auto  Cumulus Media

Poor diversification

The 3 months correlation between Proficient and Cumulus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Proficient Auto i.e., Proficient Auto and Cumulus Media go up and down completely randomly.

Pair Corralation between Proficient Auto and Cumulus Media

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the Cumulus Media. In addition to that, Proficient Auto is 1.01 times more volatile than Cumulus Media Class. It trades about -0.22 of its total potential returns per unit of risk. Cumulus Media Class is currently generating about -0.2 per unit of volatility. If you would invest  142.00  in Cumulus Media Class on September 21, 2024 and sell it today you would lose (69.00) from holding Cumulus Media Class or give up 48.59% 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.  Cumulus Media 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.

Cumulus Media Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cumulus Media Class 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 essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Proficient Auto and Cumulus Media

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

The idea behind Proficient Auto Logistics, and Cumulus Media 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.