Correlation Between Mingzhu Logistics and Werner Enterprises

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

Diversification Opportunities for Mingzhu Logistics and Werner Enterprises

-0.24

Correlation Coefficient

Mingzhu Logistics  Werner Enterprises

Very good diversification

The 3 months correlation between Mingzhu and Werner is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mingzhu Logistics Holdings and Werner Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werner Enterprises 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 Werner Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werner Enterprises has no effect on the direction of Mingzhu Logistics i.e., Mingzhu Logistics and Werner Enterprises go up and down completely randomly.

Pair Corralation between Mingzhu Logistics and Werner Enterprises

Given the investment horizon of 90 days Mingzhu Logistics Holdings is expected to generate 4.22 times more return on investment than Werner Enterprises. However, Mingzhu Logistics is 4.22 times more volatile than Werner Enterprises. It trades about -0.02 of its potential returns per unit of risk. Werner Enterprises is currently generating about -0.16 per unit of risk. If you would invest  98.00  in Mingzhu Logistics Holdings on December 29, 2024 and sell it today you would lose (22.00) from holding Mingzhu Logistics Holdings or give up 22.45% of portfolio value over 90 days.

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

Mingzhu Logistics Holdings  vs.  Werner Enterprises

Mingzhu Logistics

Risk-Adjusted Performance

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 latest inconsistent performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Werner Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Werner Enterprises 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mingzhu Logistics and Werner Enterprises

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

The idea behind Mingzhu Logistics Holdings and Werner Enterprises 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..