Correlation Between First Advantage and Saia
Can any of the company-specific risk be diversified away by investing in both First Advantage 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 First Advantage and Saia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and Saia Inc, you can compare the effects of market volatilities on First Advantage 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 First Advantage with a short position of Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Saia.
Diversification Opportunities for First Advantage and Saia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Saia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and First Advantage 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 First Advantage Corp 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 First Advantage i.e., First Advantage and Saia go up and down completely randomly.
Pair Corralation between First Advantage and Saia
Allowing for the 90-day total investment horizon First Advantage is expected to generate 1.94 times less return on investment than Saia. But when comparing it to its historical volatility, First Advantage Corp is 2.07 times less risky than Saia. It trades about 0.06 of its potential returns per unit of risk. Saia Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 39,039 in Saia Inc on August 26, 2024 and sell it today you would earn a total of 15,130 from holding Saia Inc or generate 38.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Saia Inc
Performance |
| Timeline |
| First Advantage Corp |
| Saia Inc |
First Advantage and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Saia
The main advantage of trading using opposite First Advantage and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage 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.| First Advantage vs. ExlService Holdings | First Advantage vs. WNS Holdings | First Advantage vs. Gartner | First Advantage vs. The Hackett Group |
| Saia vs. Old Dominion Freight | Saia vs. ArcBest Corp | Saia vs. Knight Transportation | Saia vs. Universal Logistics Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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