Correlation Between Proficient Auto and FedEx

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

Diversification Opportunities for Proficient Auto and FedEx

-0.19

Correlation Coefficient

Proficient Auto  FedEx

Good diversification

The 3 months correlation between Proficient and FedEx is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx 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 FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of Proficient Auto i.e., Proficient Auto and FedEx go up and down completely randomly.

Pair Corralation between Proficient Auto and FedEx

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the FedEx. In addition to that, Proficient Auto is 2.0 times more volatile than FedEx. It trades about -0.17 of its total potential returns per unit of risk. FedEx is currently generating about 0.0 per unit of volatility. If you would invest  28,497  in FedEx on September 13, 2024 and sell it today you would lose (381.00) from holding FedEx or give up 1.34% of portfolio value over 90 days.

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

Proficient Auto Logistics,  vs.  FedEx

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.

FedEx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FedEx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, FedEx is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Proficient Auto and FedEx

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

The idea behind Proficient Auto Logistics, and FedEx 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.