Correlation Between Universal Logistics and Schneider National

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

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

Diversification Opportunities for Universal Logistics and Schneider National

0.8

Correlation Coefficient

Universal Logistics  Schneider National

Very poor diversification

The 3 months correlation between Universal and Schneider is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Universal Logistics Holdings and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National and Universal Logistics 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 Universal Logistics Holdings 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 Universal Logistics i.e., Universal Logistics and Schneider National go up and down completely randomly.

Pair Corralation between Universal Logistics and Schneider National

Considering the 90-day investment horizon Universal Logistics Holdings is expected to under-perform the Schneider National. In addition to that, Universal Logistics is 2.36 times more volatile than Schneider National. It trades about -0.17 of its total potential returns per unit of risk. Schneider National is currently generating about -0.11 per unit of volatility. If you would invest  3,079  in Schneider National on November 19, 2024 and sell it today you would lose (327.00) from holding Schneider National or give up 10.62% of portfolio value over 90 days.

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

Universal Logistics Holdings  vs.  Schneider National

Universal Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Logistics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 latest unfluctuating performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Universal Logistics and Schneider National

The main advantage of trading using opposite Universal Logistics and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Logistics 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 Universal Logistics Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.