Correlation Between Proficient Auto and Landstar System

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

Diversification Opportunities for Proficient Auto and Landstar System

0.66

Correlation Coefficient

Proficient Auto  Landstar System

Poor diversification

The 3 months correlation between Proficient and Landstar is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System 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 Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of Proficient Auto i.e., Proficient Auto and Landstar System go up and down completely randomly.

Pair Corralation between Proficient Auto and Landstar System

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to generate 3.19 times more return on investment than Landstar System. However, Proficient Auto is 3.19 times more volatile than Landstar System. It trades about 0.01 of its potential returns per unit of risk. Landstar System is currently generating about -0.12 per unit of risk. If you would invest  917.00  in Proficient Auto Logistics, on February 3, 2025 and sell it today you would lose (78.00) from holding Proficient Auto Logistics, or give up 8.51% 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.  Landstar System

Proficient Auto Logi

Risk-Adjusted Performance

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 quite persistent basic indicators, Proficient Auto is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Landstar System

Risk-Adjusted Performance

Very Weak

Over the last 90 days Landstar System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Proficient Auto and Landstar System

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

The idea behind Proficient Auto Logistics, and Landstar System 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.