Correlation Between Schneider National and Patriot Transportation
Can any of the company-specific risk be diversified away by investing in both Schneider National and Patriot Transportation 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 Schneider National and Patriot Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider National and Patriot Transportation Holding, you can compare the effects of market volatilities on Schneider National and Patriot Transportation 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 Schneider National with a short position of Patriot Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider National and Patriot Transportation.
Diversification Opportunities for Schneider National and Patriot Transportation
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schneider and Patriot is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Schneider National and Patriot Transportation Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Transportation and Schneider National 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 Schneider National are associated (or correlated) with Patriot Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Transportation has no effect on the direction of Schneider National i.e., Schneider National and Patriot Transportation go up and down completely randomly.
Pair Corralation between Schneider National and Patriot Transportation
Given the investment horizon of 90 days Schneider National is expected to generate 1.06 times more return on investment than Patriot Transportation. However, Schneider National is 1.06 times more volatile than Patriot Transportation Holding. It trades about 0.05 of its potential returns per unit of risk. Patriot Transportation Holding is currently generating about -0.18 per unit of risk. If you would invest 2,655 in Schneider National on August 31, 2024 and sell it today you would earn a total of 706.00 from holding Schneider National or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Schneider National vs. Patriot Transportation Holding
Performance |
| Timeline |
| Schneider National |
| Patriot Transportation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Schneider National and Patriot Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider National and Patriot Transportation
The main advantage of trading using opposite Schneider National and Patriot Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider National position performs unexpectedly, Patriot Transportation 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 Patriot Transportation will offset losses from the drop in Patriot Transportation's long position.| Schneider National vs. Marten Transport | Schneider National vs. Heartland Express | Schneider National vs. Universal Logistics Holdings | Schneider National vs. Covenant Logistics Group, |
| Patriot Transportation vs. Universal Logistics Holdings | Patriot Transportation vs. Marten Transport | Patriot Transportation vs. Heartland Express | Patriot Transportation vs. Werner Enterprises |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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