Correlation Between PAMT P and Mingzhu Logistics

Can any of the company-specific risk be diversified away by investing in both PAMT P and Mingzhu Logistics 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 PAMT P and Mingzhu Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PAMT P and Mingzhu Logistics Holdings, you can compare the effects of market volatilities on PAMT P and Mingzhu Logistics 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 PAMT P with a short position of Mingzhu Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAMT P and Mingzhu Logistics.

Diversification Opportunities for PAMT P and Mingzhu Logistics

-0.34

Correlation Coefficient

PAMT P  Mingzhu Logistics

Very good diversification

The 3 months correlation between PAMT and Mingzhu is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PAMT P and Mingzhu Logistics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingzhu Logistics and PAMT P 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 PAMT P are associated (or correlated) with Mingzhu Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingzhu Logistics has no effect on the direction of PAMT P i.e., PAMT P and Mingzhu Logistics go up and down completely randomly.

Pair Corralation between PAMT P and Mingzhu Logistics

Given the investment horizon of 90 days PAMT P is expected to generate 0.71 times more return on investment than Mingzhu Logistics. However, PAMT P is 1.41 times less risky than Mingzhu Logistics. It trades about -0.13 of its potential returns per unit of risk. Mingzhu Logistics Holdings is currently generating about -0.25 per unit of risk. If you would invest  1,792  in PAMT P on September 22, 2024 and sell it today you would lose (143.00) from holding PAMT P or give up 7.98% of portfolio value over 90 days.

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

PAMT P  vs.  Mingzhu Logistics Holdings

PAMT P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAMT P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, PAMT P is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Mingzhu Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mingzhu Logistics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PAMT P and Mingzhu Logistics

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

The idea behind PAMT P and Mingzhu Logistics Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.