Correlation Between Old Dominion and RMG Acquisition
Can any of the company-specific risk be diversified away by investing in both Old Dominion and RMG Acquisition 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 RMG Acquisition 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 RMG Acquisition Corp, you can compare the effects of market volatilities on Old Dominion and RMG Acquisition 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 RMG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and RMG Acquisition.
Diversification Opportunities for Old Dominion and RMG Acquisition
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and RMG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and RMG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMG Acquisition Corp 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 RMG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMG Acquisition Corp has no effect on the direction of Old Dominion i.e., Old Dominion and RMG Acquisition go up and down completely randomly.
Pair Corralation between Old Dominion and RMG Acquisition
If you would invest 20,098 in Old Dominion Freight on September 2, 2024 and sell it today you would earn a total of 2,416 from holding Old Dominion Freight or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Old Dominion Freight vs. RMG Acquisition Corp
Performance |
| Timeline |
| Old Dominion Freight |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Old Dominion and RMG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and RMG Acquisition
The main advantage of trading using opposite Old Dominion and RMG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, RMG Acquisition 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 RMG Acquisition will offset losses from the drop in RMG Acquisition's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| RMG Acquisition vs. Old Dominion Freight | RMG Acquisition vs. Lindblad Expeditions Holdings | RMG Acquisition vs. Fossil Group | RMG Acquisition vs. Nexstar Broadcasting 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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