Correlation Between Marten Transport and RXO

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

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

Diversification Opportunities for Marten Transport and RXO

-0.04

Correlation Coefficient

Marten Transport  RXO

Good diversification

The 3 months correlation between Marten and RXO is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marten Transport and RXO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RXO Inc and Marten Transport 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 Marten Transport 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 Marten Transport i.e., Marten Transport and RXO go up and down completely randomly.

Pair Corralation between Marten Transport and RXO

Given the investment horizon of 90 days Marten Transport is expected to generate 3.68 times less return on investment than RXO. But when comparing it to its historical volatility, Marten Transport is 1.63 times less risky than RXO. It trades about 0.02 of its potential returns per unit of risk. RXO Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,846  in RXO Inc on September 3, 2024 and sell it today you would earn a total of  157.00  from holding RXO Inc or generate 5.52% return on investment over 90 days.

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

Marten Transport  vs.  RXO Inc

Marten Transport

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marten Transport are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Marten Transport is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RXO Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RXO Inc are ranked lower than 3 (%) 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 January 2025.

Pair Trading with Marten Transport and RXO

The main advantage of trading using opposite Marten Transport and RXO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marten Transport 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 Marten Transport 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.