Correlation Between RXO and Schneider National

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

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

Diversification Opportunities for RXO and Schneider National

0.9

Correlation Coefficient

RXO  Schneider National

Almost no diversification

The 3 months correlation between RXO and Schneider is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding RXO Inc and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National and RXO 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 RXO Inc 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 RXO i.e., RXO and Schneider National go up and down completely randomly.

Pair Corralation between RXO and Schneider National

Considering the 90-day investment horizon RXO Inc is expected to generate 2.04 times more return on investment than Schneider National. However, RXO is 2.04 times more volatile than Schneider National. It trades about -0.1 of its potential returns per unit of risk. Schneider National is currently generating about -0.22 per unit of risk. If you would invest  2,410  in RXO Inc on December 28, 2024 and sell it today you would lose (475.00) from holding RXO Inc or give up 19.71% of portfolio value over 90 days.

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

RXO Inc  vs.  Schneider National

RXO Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days RXO Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Schneider National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schneider National has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with RXO and Schneider National

The main advantage of trading using opposite RXO and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RXO 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 RXO Inc 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.