Correlation Between ArcBest Corp and Marten Transport
Can any of the company-specific risk be diversified away by investing in both ArcBest Corp and Marten Transport 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 Marten Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcBest Corp and Marten Transport, you can compare the effects of market volatilities on ArcBest Corp and Marten Transport 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 Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcBest Corp and Marten Transport.
Diversification Opportunities for ArcBest Corp and Marten Transport
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ArcBest and Marten is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ArcBest Corp and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport 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 Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of ArcBest Corp i.e., ArcBest Corp and Marten Transport go up and down completely randomly.
Pair Corralation between ArcBest Corp and Marten Transport
Given the investment horizon of 90 days ArcBest Corp is expected to generate 1.84 times more return on investment than Marten Transport. However, ArcBest Corp is 1.84 times more volatile than Marten Transport. It trades about 0.08 of its potential returns per unit of risk. Marten Transport is currently generating about 0.11 per unit of risk. If you would invest 10,238 in ArcBest Corp on August 23, 2024 and sell it today you would earn a total of 662.00 from holding ArcBest Corp or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcBest Corp vs. Marten Transport
Performance |
| Timeline |
| ArcBest Corp |
| Marten Transport |
ArcBest Corp and Marten Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcBest Corp and Marten Transport
The main advantage of trading using opposite ArcBest Corp and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcBest Corp position performs unexpectedly, Marten Transport 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 Marten Transport will offset losses from the drop in Marten Transport's long position.| ArcBest Corp vs. Small Cap Core | ArcBest Corp vs. Morningstar Unconstrained Allocation | ArcBest Corp vs. Mutual Of America | ArcBest Corp vs. Ep Emerging Markets |
| Marten Transport vs. Werner Enterprises | Marten Transport vs. Covenant Logistics Group, | Marten Transport vs. Universal Logistics Holdings | Marten Transport vs. Schneider National |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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