Correlation Between HE Equipment and Saia
Can any of the company-specific risk be diversified away by investing in both HE Equipment 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 HE Equipment and Saia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Saia Inc, you can compare the effects of market volatilities on HE Equipment 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 HE Equipment with a short position of Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Saia.
Diversification Opportunities for HE Equipment and Saia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HEES and Saia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and HE Equipment 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 HE Equipment Services 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 HE Equipment i.e., HE Equipment and Saia go up and down completely randomly.
Pair Corralation between HE Equipment and Saia
Given the investment horizon of 90 days HE Equipment is expected to generate 2.28 times less return on investment than Saia. But when comparing it to its historical volatility, HE Equipment Services is 1.12 times less risky than Saia. It trades about 0.04 of its potential returns per unit of risk. Saia Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 23,548 in Saia Inc on September 3, 2024 and sell it today you would earn a total of 33,360 from holding Saia Inc or generate 141.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Saia Inc
Performance |
| Timeline |
| HE Equipment Services |
| Saia Inc |
HE Equipment and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Saia
The main advantage of trading using opposite HE Equipment and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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.| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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