Correlation Between Palomar Holdings and Mingteng International

Can any of the company-specific risk be diversified away by investing in both Palomar Holdings and Mingteng International 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 Palomar Holdings and Mingteng International into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Palomar Holdings and Mingteng International

0.0

Correlation Coefficient

Palomar Holdings  Mingteng International

Pay attention - limited upside

The 3 months correlation between Palomar and Mingteng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and Mingteng International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingteng International and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with Mingteng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingteng International has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and Mingteng International go up and down completely randomly.

Pair Corralation between Palomar Holdings and Mingteng International

Given the investment horizon of 90 days Palomar Holdings is expected to generate 4.31 times less return on investment than Mingteng International. But when comparing it to its historical volatility, Palomar Holdings is 4.28 times less risky than Mingteng International. It trades about 0.08 of its potential returns per unit of risk. Mingteng International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Mingteng International on August 31, 2024 and sell it today you would earn a total of  119.00  from holding Mingteng International or generate 27.36% return on investment over 90 days.

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

Palomar Holdings  vs.  Mingteng International

Palomar Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Palomar Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating primary indicators, Palomar Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Mingteng International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mingteng International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Mingteng International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palomar Holdings and Mingteng International

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

The idea behind Palomar Holdings and Mingteng International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.