Correlation Between Knight Transportation and Yellow Corp

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

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

Diversification Opportunities for Knight Transportation and Yellow Corp

0.0

Correlation Coefficient

Knight Transportation  Yellow Corp

Pay attention - limited upside

The 3 months correlation between Knight and Yellow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Knight Transportation and Yellow Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Corp and Knight 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 Knight Transportation are associated (or correlated) with Yellow Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Corp has no effect on the direction of Knight Transportation i.e., Knight Transportation and Yellow Corp go up and down completely randomly.

Pair Corralation between Knight Transportation and Yellow Corp

If you would invest (100.00) in Yellow Corp on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Yellow Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Knight Transportation  vs.  Yellow Corp

Knight Transportation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Knight Transportation 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 fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Yellow Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Knight Transportation and Yellow Corp

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

The idea behind Knight Transportation and Yellow Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.