Correlation Between PAMT P and RXO

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

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

Diversification Opportunities for PAMT P and RXO

-0.27

Correlation Coefficient

PAMT P  RXO

Very good diversification

The 3 months correlation between PAMT and RXO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PAMT P and RXO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RXO Inc and PAMT P 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 PAMT P are associated (or correlated) with RXO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RXO Inc has no effect on the direction of PAMT P i.e., PAMT P and RXO go up and down completely randomly.

Pair Corralation between PAMT P and RXO

Given the investment horizon of 90 days PAMT P is expected to under-perform the RXO. But the stock apears to be less risky and, when comparing its historical volatility, PAMT P is 1.04 times less risky than RXO. The stock trades about -0.06 of its potential returns per unit of risk. The RXO Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,476  in RXO Inc on May 2, 2025 and sell it today you would earn a total of  68.00  from holding RXO Inc or generate 4.61% return on investment over 90 days.

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

PAMT P  vs.  RXO Inc

PAMT P

Risk-Adjusted Performance

Very Weak

Over the last 90 days PAMT P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

RXO Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RXO Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, RXO may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with PAMT P and RXO

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

The idea behind PAMT P and RXO Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .