Correlation Between Saia and Heartland Express
Can any of the company-specific risk be diversified away by investing in both Saia and Heartland Express 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 Heartland Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and Heartland Express, you can compare the effects of market volatilities on Saia and Heartland Express 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 Heartland Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Heartland Express.
Diversification Opportunities for Saia and Heartland Express
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saia and Heartland is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Heartland Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Express 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 Heartland Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Express has no effect on the direction of Saia i.e., Saia and Heartland Express go up and down completely randomly.
Pair Corralation between Saia and Heartland Express
Assuming the 90 days horizon Saia Inc is expected to generate 1.67 times more return on investment than Heartland Express. However, Saia is 1.67 times more volatile than Heartland Express. It trades about 0.07 of its potential returns per unit of risk. Heartland Express is currently generating about -0.03 per unit of risk. If you would invest 20,000 in Saia Inc on October 9, 2024 and sell it today you would earn a total of 25,000 from holding Saia Inc or generate 125.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Saia Inc vs. Heartland Express
Performance |
Timeline |
Saia Inc |
Heartland Express |
Saia and Heartland Express Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saia and Heartland Express
The main advantage of trading using opposite Saia and Heartland Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia position performs unexpectedly, Heartland Express 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 Heartland Express will offset losses from the drop in Heartland Express' long position.Saia vs. Quaker Chemical | Saia vs. Thai Beverage Public | Saia vs. China BlueChemical | Saia vs. Silicon Motion Technology |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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