Correlation Between TRADEDOUBLER and Covenant Logistics

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

By analyzing existing cross correlation between TRADEDOUBLER AB SK and Covenant Logistics Group, you can compare the effects of market volatilities on TRADEDOUBLER and Covenant Logistics 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 TRADEDOUBLER with a short position of Covenant Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Covenant Logistics.

Diversification Opportunities for TRADEDOUBLER and Covenant Logistics

-0.9

Correlation Coefficient

TRADEDOUBLER  Covenant Logistics

Pay attention - limited upside

The 3 months correlation between TRADEDOUBLER and Covenant is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Covenant Logistics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covenant Logistics and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with Covenant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covenant Logistics has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Covenant Logistics go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and Covenant Logistics

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 2.75 times more return on investment than Covenant Logistics. However, TRADEDOUBLER is 2.75 times more volatile than Covenant Logistics Group. It trades about 0.19 of its potential returns per unit of risk. Covenant Logistics Group is currently generating about -0.2 per unit of risk. If you would invest  28.00  in TRADEDOUBLER AB SK on December 24, 2024 and sell it today you would earn a total of  20.00  from holding TRADEDOUBLER AB SK or generate 71.43% return on investment over 90 days.

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

TRADEDOUBLER AB SK  vs.  Covenant Logistics Group

TRADEDOUBLER AB SK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.

Covenant Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Covenant Logistics Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TRADEDOUBLER and Covenant Logistics

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

The idea behind TRADEDOUBLER AB SK and Covenant Logistics Group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.