Correlation Between PAM Transportation and US Xpress
Can any of the company-specific risk be diversified away by investing in both PAM Transportation and US Xpress 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 PAM Transportation and US Xpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Transportation Services and US Xpress Enterprises, you can compare the effects of market volatilities on PAM Transportation and US Xpress 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 PAM Transportation with a short position of US Xpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Transportation and US Xpress.
Diversification Opportunities for PAM Transportation and US Xpress
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between PAM and USX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding PAM Transportation Services and US Xpress Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Xpress Enterprises and PAM Transportation 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 PAM Transportation Services are associated (or correlated) with US Xpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Xpress Enterprises has no effect on the direction of PAM Transportation i.e., PAM Transportation and US Xpress go up and down completely randomly.
Pair Corralation between PAM Transportation and US Xpress
If you would invest 1,570 in PAM Transportation Services on August 24, 2024 and sell it today you would earn a total of 610.00 from holding PAM Transportation Services or generate 38.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 6.25% |
| Values | Daily Returns |
PAM Transportation Services vs. US Xpress Enterprises
Performance |
| Timeline |
| PAM Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| US Xpress Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PAM Transportation and US Xpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Transportation and US Xpress
The main advantage of trading using opposite PAM Transportation and US Xpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Transportation position performs unexpectedly, US Xpress 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 US Xpress will offset losses from the drop in US Xpress' long position.| PAM Transportation vs. Heartland Express | PAM Transportation vs. Werner Enterprises | PAM Transportation vs. Universal Logistics Holdings | PAM Transportation vs. Schneider National |
| US Xpress vs. Heartland Express | US Xpress vs. Universal Logistics Holdings | US Xpress vs. Marten Transport | US Xpress vs. Werner Enterprises |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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