Correlation Between Knight Transportation and Schneider National
Can any of the company-specific risk be diversified away by investing in both Knight Transportation and Schneider National 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 Knight Transportation and Schneider National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Transportation and Schneider National, you can compare the effects of market volatilities on Knight Transportation and Schneider National 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 Knight Transportation with a short position of Schneider National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Transportation and Schneider National.
Diversification Opportunities for Knight Transportation and Schneider National
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Knight and Schneider is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Knight Transportation and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National and Knight Transportation 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 Knight Transportation are associated (or correlated) with Schneider National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider National has no effect on the direction of Knight Transportation i.e., Knight Transportation and Schneider National go up and down completely randomly.
Pair Corralation between Knight Transportation and Schneider National
Considering the 90-day investment horizon Knight Transportation is expected to under-perform the Schneider National. In addition to that, Knight Transportation is 1.11 times more volatile than Schneider National. It trades about -0.3 of its total potential returns per unit of risk. Schneider National is currently generating about -0.32 per unit of volatility. If you would invest 2,647 in Schneider National on December 24, 2024 and sell it today you would lose (276.00) from holding Schneider National or give up 10.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Transportation vs. Schneider National
Performance |
| Timeline |
| Knight Transportation |
| Schneider National |
Knight Transportation and Schneider National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Transportation and Schneider National
The main advantage of trading using opposite Knight Transportation and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Transportation position performs unexpectedly, Schneider National 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 Schneider National will offset losses from the drop in Schneider National's long position.| Knight Transportation vs. Marten Transport | Knight Transportation vs. Heartland Express | Knight Transportation vs. Universal Logistics Holdings | Knight Transportation vs. Schneider National |
| Schneider National vs. Marten Transport | Schneider National vs. Heartland Express | Schneider National vs. Universal Logistics Holdings | Schneider National vs. Covenant Logistics Group, |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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