Correlation Between Patriot Transportation and Schneider National

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

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

Diversification Opportunities for Patriot Transportation and Schneider National

-0.74

Correlation Coefficient

Patriot Transportation  Schneider National

Pay attention - limited upside

The 3 months correlation between Patriot and Schneider is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Patriot Transportation Holding and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National and Patriot 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 Patriot Transportation Holding are associated (or correlated) with Schneider National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider National has no effect on the direction of Patriot Transportation i.e., Patriot Transportation and Schneider National go up and down completely randomly.

Pair Corralation between Patriot Transportation and Schneider National

If you would invest  2,705  in Schneider National on August 31, 2024 and sell it today you would earn a total of  580.00  from holding Schneider National or generate 21.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Patriot Transportation Holding  vs.  Schneider National

Patriot Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patriot Transportation Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Patriot Transportation is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Schneider National

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider National are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Schneider National reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patriot Transportation and Schneider National

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

The idea behind Patriot Transportation Holding and Schneider National 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.