Correlation Between Crimson Wine and PAMT P

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

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

Diversification Opportunities for Crimson Wine and PAMT P

0.34

Correlation Coefficient

Crimson Wine  PAMT P

Weak diversification

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

Pair Corralation between Crimson Wine and PAMT P

Given the investment horizon of 90 days Crimson Wine is expected to under-perform the PAMT P. But the otc stock apears to be less risky and, when comparing its historical volatility, Crimson Wine is 2.15 times less risky than PAMT P. The otc stock trades about -0.02 of its potential returns per unit of risk. The PAMT P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,246  in PAMT P on May 28, 2025 and sell it today you would earn a total of  1.00  from holding PAMT P or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Crimson Wine  vs.  PAMT P

Crimson Wine

Risk-Adjusted Performance

Weakest

Over the last 90 days Crimson Wine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Crimson Wine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

PAMT P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PAMT P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Crimson Wine and PAMT P

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

The idea behind Crimson Wine and PAMT P 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.