Correlation Between Mingzhu Logistics and PTSI Old

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

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

Diversification Opportunities for Mingzhu Logistics and PTSI Old

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Correlation Coefficient

Mingzhu Logistics  PTSI Old

Pay attention - limited upside

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

Pair Corralation between Mingzhu Logistics and PTSI Old

Given the investment horizon of 90 days Mingzhu Logistics Holdings is expected to under-perform the PTSI Old. In addition to that, Mingzhu Logistics is 2.21 times more volatile than PTSI Old. It trades about -0.04 of its total potential returns per unit of risk. PTSI Old is currently generating about 0.01 per unit of volatility. If you would invest  2,535  in PTSI Old on October 9, 2024 and sell it today you would lose (355.00) from holding PTSI Old or give up 14.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	92.95%
Values	Daily Returns

Mingzhu Logistics Holdings  vs.  PTSI Old

Mingzhu Logistics

Risk-Adjusted Performance

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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 unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PTSI Old

Risk-Adjusted Performance

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Solid

Over the last 90 days PTSI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, PTSI Old demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mingzhu Logistics and PTSI Old

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

The idea behind Mingzhu Logistics Holdings and PTSI Old 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.