Correlation Between PC Connection and Marten Transport
Can any of the company-specific risk be diversified away by investing in both PC Connection 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 PC Connection and Marten Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PC Connection and Marten Transport, you can compare the effects of market volatilities on PC Connection 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 PC Connection with a short position of Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of PC Connection and Marten Transport.
Diversification Opportunities for PC Connection and Marten Transport
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNXN and Marten is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PC Connection and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport and PC Connection 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 PC Connection 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 PC Connection i.e., PC Connection and Marten Transport go up and down completely randomly.
Pair Corralation between PC Connection and Marten Transport
Given the investment horizon of 90 days PC Connection is expected to generate 1.6 times less return on investment than Marten Transport. But when comparing it to its historical volatility, PC Connection is 1.74 times less risky than Marten Transport. It trades about 0.18 of its potential returns per unit of risk. Marten Transport is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,557 in Marten Transport on October 23, 2024 and sell it today you would earn a total of 76.00 from holding Marten Transport or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PC Connection vs. Marten Transport
Performance |
| Timeline |
| PC Connection |
| Marten Transport |
PC Connection and Marten Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PC Connection and Marten Transport
The main advantage of trading using opposite PC Connection and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PC Connection 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.| PC Connection vs. ScanSource | PC Connection vs. Insight Enterprises | PC Connection vs. Avnet Inc | PC Connection vs. Synnex |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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