Correlation Between NESNVX and Saia

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

By analyzing existing cross correlation between NESNVX 115 14 JAN 27 and Saia Inc, you can compare the effects of market volatilities on NESNVX and Saia 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 NESNVX with a short position of Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Saia.

Diversification Opportunities for NESNVX and Saia

0.81

Correlation Coefficient

NESNVX  Saia

Very poor diversification

The 3 months correlation between NESNVX and Saia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 115 14 JAN 27 and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and NESNVX 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 NESNVX 115 14 JAN 27 are associated (or correlated) with Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of NESNVX i.e., NESNVX and Saia go up and down completely randomly.

Pair Corralation between NESNVX and Saia

Assuming the 90 days trading horizon NESNVX is expected to generate 11.01 times less return on investment than Saia. But when comparing it to its historical volatility, NESNVX 115 14 JAN 27 is 6.16 times less risky than Saia. It trades about 0.04 of its potential returns per unit of risk. Saia Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  20,861  in Saia Inc on September 21, 2024 and sell it today you would earn a total of  28,632  from holding Saia Inc or generate 137.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	39.19%
Values	Daily Returns

NESNVX 115 14 JAN 27  vs.  Saia Inc

NESNVX 115 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 115 14 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NESNVX 115 14 JAN 27 investors.

Saia Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Saia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NESNVX and Saia

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

The idea behind NESNVX 115 14 JAN 27 and Saia Inc 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.