Correlation Between Proficient Auto and MCKESSON

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

Diversification Opportunities for Proficient Auto and MCKESSON

0.68

Correlation Coefficient

Proficient Auto  MCKESSON

Poor diversification

The 3 months correlation between Proficient and MCKESSON is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and MCKESSON P NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCKESSON P NEW 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 MCKESSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCKESSON P NEW has no effect on the direction of Proficient Auto i.e., Proficient Auto and MCKESSON go up and down completely randomly.

Pair Corralation between Proficient Auto and MCKESSON

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the MCKESSON. In addition to that, Proficient Auto is 21.91 times more volatile than MCKESSON P NEW. It trades about -0.22 of its total potential returns per unit of risk. MCKESSON P NEW is currently generating about -0.21 per unit of volatility. If you would invest  9,990  in MCKESSON P NEW on September 19, 2024 and sell it today you would lose (253.00) from holding MCKESSON P NEW or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.06%
Values	Daily Returns

Proficient Auto Logistics,  vs.  MCKESSON P NEW

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.

MCKESSON P NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCKESSON P NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MCKESSON 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 MCKESSON

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

The idea behind Proficient Auto Logistics, and MCKESSON P NEW 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.