Correlation Between Fossil and Saia
Can any of the company-specific risk be diversified away by investing in both Fossil 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 Fossil and Saia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Saia Inc, you can compare the effects of market volatilities on Fossil 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 Fossil with a short position of Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Saia.
Diversification Opportunities for Fossil and Saia
Very weak diversification
The 3 months correlation between Fossil and Saia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and Fossil 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 Fossil Group 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 Fossil i.e., Fossil and Saia go up and down completely randomly.
Pair Corralation between Fossil and Saia
Given the investment horizon of 90 days Fossil is expected to generate 1.25 times less return on investment than Saia. In addition to that, Fossil is 1.45 times more volatile than Saia Inc. It trades about 0.05 of its total potential returns per unit of risk. Saia Inc is currently generating about 0.09 per unit of volatility. If you would invest 40,948 in Saia Inc on August 29, 2024 and sell it today you would earn a total of 15,648 from holding Saia Inc or generate 38.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Saia Inc
Performance |
| Timeline |
| Fossil Group |
| Saia Inc |
Fossil and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Saia
The main advantage of trading using opposite Fossil and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil 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.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Saia vs. Knight Transportation | Saia vs. Universal Logistics Holdings | Saia vs. Heartland Express | Saia 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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