Correlation Between Old Dominion and Sunedison
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Sunedison 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 Sunedison 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 Sunedison, you can compare the effects of market volatilities on Old Dominion and Sunedison 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 Sunedison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Sunedison.
Diversification Opportunities for Old Dominion and Sunedison
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and Sunedison is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Sunedison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunedison 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 Sunedison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunedison has no effect on the direction of Old Dominion i.e., Old Dominion and Sunedison go up and down completely randomly.
Pair Corralation between Old Dominion and Sunedison
Given the investment horizon of 90 days Old Dominion Freight is expected to generate 0.14 times more return on investment than Sunedison. However, Old Dominion Freight is 7.06 times less risky than Sunedison. It trades about 0.01 of its potential returns per unit of risk. Sunedison is currently generating about -0.06 per unit of risk. If you would invest 19,989 in Old Dominion Freight on September 15, 2024 and sell it today you would earn a total of 80.00 from holding Old Dominion Freight or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Old Dominion Freight vs. Sunedison
Performance |
| Timeline |
| Old Dominion Freight |
| Sunedison |
Old Dominion and Sunedison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Sunedison
The main advantage of trading using opposite Old Dominion and Sunedison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Sunedison 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 Sunedison will offset losses from the drop in Sunedison's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Sunedison vs. United Fire Group | Sunedison vs. Pekin Life Insurance | Sunedison vs. Aterian | Sunedison vs. Old Dominion Freight |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |