Correlation Between Old Dominion and Air T
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Air T 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 Old Dominion and Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Air T Inc, you can compare the effects of market volatilities on Old Dominion and Air T 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 Old Dominion with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Air T.
Diversification Opportunities for Old Dominion and Air T
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Air is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Old Dominion i.e., Old Dominion and Air T go up and down completely randomly.
Pair Corralation between Old Dominion and Air T
Given the investment horizon of 90 days Old Dominion Freight is expected to generate 0.52 times more return on investment than Air T. However, Old Dominion Freight is 1.91 times less risky than Air T. It trades about 0.05 of its potential returns per unit of risk. Air T Inc is currently generating about 0.01 per unit of risk. If you would invest 14,236 in Old Dominion Freight on August 27, 2024 and sell it today you would earn a total of 7,789 from holding Old Dominion Freight or generate 54.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Air T Inc
Performance |
| Timeline |
| Old Dominion Freight |
| Air T Inc |
Old Dominion and Air T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Air T
The main advantage of trading using opposite Old Dominion and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Air T 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 Air T will offset losses from the drop in Air T's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Air T vs. Addentax Group Corp | Air T vs. Hub Group | Air T vs. Landstar System | Air T vs. JB Hunt Transport |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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