Correlation Between Covenant Logistics and TRADEDOUBLER

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

By analyzing existing cross correlation between Covenant Logistics Group and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on Covenant Logistics and TRADEDOUBLER 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 Covenant Logistics with a short position of TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covenant Logistics and TRADEDOUBLER.

Diversification Opportunities for Covenant Logistics and TRADEDOUBLER

0.18

Correlation Coefficient

Covenant Logistics  TRADEDOUBLER

Average diversification

The 3 months correlation between Covenant and TRADEDOUBLER is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Covenant Logistics Group and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Covenant 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 Covenant Logistics Group are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Covenant Logistics i.e., Covenant Logistics and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Covenant Logistics and TRADEDOUBLER

Assuming the 90 days horizon Covenant Logistics Group is expected to generate 0.64 times more return on investment than TRADEDOUBLER. However, Covenant Logistics Group is 1.56 times less risky than TRADEDOUBLER. It trades about 0.12 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.05 per unit of risk. If you would invest  2,345  in Covenant Logistics Group on October 11, 2024 and sell it today you would earn a total of  375.00  from holding Covenant Logistics Group or generate 15.99% return on investment over 90 days.

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

Covenant Logistics Group  vs.  TRADEDOUBLER AB SK

Covenant Logistics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Covenant Logistics Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Covenant Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Covenant Logistics and TRADEDOUBLER

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

The idea behind Covenant Logistics Group and TRADEDOUBLER AB SK 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.