Correlation Between ArcBest Corp and BEST
Can any of the company-specific risk be diversified away by investing in both ArcBest Corp and BEST 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 ArcBest Corp and BEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcBest Corp and BEST Inc, you can compare the effects of market volatilities on ArcBest Corp and BEST 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 ArcBest Corp with a short position of BEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcBest Corp and BEST.
Diversification Opportunities for ArcBest Corp and BEST
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcBest and BEST is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ArcBest Corp and BEST Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEST Inc and ArcBest Corp 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 ArcBest Corp are associated (or correlated) with BEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEST Inc has no effect on the direction of ArcBest Corp i.e., ArcBest Corp and BEST go up and down completely randomly.
Pair Corralation between ArcBest Corp and BEST
Given the investment horizon of 90 days ArcBest Corp is expected to generate 13.91 times more return on investment than BEST. However, ArcBest Corp is 13.91 times more volatile than BEST Inc. It trades about 0.08 of its potential returns per unit of risk. BEST Inc is currently generating about -0.11 per unit of risk. If you would invest 10,583 in ArcBest Corp on August 27, 2024 and sell it today you would earn a total of 675.00 from holding ArcBest Corp or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcBest Corp vs. BEST Inc
Performance |
| Timeline |
| ArcBest Corp |
| BEST Inc |
ArcBest Corp and BEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcBest Corp and BEST
The main advantage of trading using opposite ArcBest Corp and BEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcBest Corp position performs unexpectedly, BEST 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 BEST will offset losses from the drop in BEST's long position.| ArcBest Corp vs. Old Dominion Freight | ArcBest Corp vs. Marten Transport | ArcBest Corp vs. Werner Enterprises | ArcBest Corp vs. Knight Transportation |
| BEST vs. Heartland Express | BEST vs. Universal Logistics Holdings | BEST vs. Marten Transport | BEST vs. Werner Enterprises |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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