Correlation Between Saia and Marchex

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

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

Diversification Opportunities for Saia and Marchex

-0.03

Correlation Coefficient

Saia  Marchex

Good diversification

The 3 months correlation between Saia and Marchex is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Saia 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 Saia Inc are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Saia i.e., Saia and Marchex go up and down completely randomly.

Pair Corralation between Saia and Marchex

Given the investment horizon of 90 days Saia is expected to generate 3.43 times less return on investment than Marchex. But when comparing it to its historical volatility, Saia Inc is 1.29 times less risky than Marchex. It trades about 0.01 of its potential returns per unit of risk. Marchex is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Marchex on October 15, 2024 and sell it today you would earn a total of  7.00  from holding Marchex or generate 3.72% return on investment over 90 days.

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

Saia Inc  vs.  Marchex

Saia Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Saia is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Marchex

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marchex are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Marchex may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Saia and Marchex

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

The idea behind Saia Inc and Marchex 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.