Correlation Between Schneider National and Universal Logistics
Can any of the company-specific risk be diversified away by investing in both Schneider National and Universal Logistics 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 Universal Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider National and Universal Logistics Holdings, you can compare the effects of market volatilities on Schneider National and Universal Logistics 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 Universal Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider National and Universal Logistics.
Diversification Opportunities for Schneider National and Universal Logistics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Schneider and Universal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Schneider National and Universal Logistics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Logistics 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 Universal Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Logistics has no effect on the direction of Schneider National i.e., Schneider National and Universal Logistics go up and down completely randomly.
Pair Corralation between Schneider National and Universal Logistics
Given the investment horizon of 90 days Schneider National is expected to generate 1.16 times less return on investment than Universal Logistics. But when comparing it to its historical volatility, Schneider National is 1.1 times less risky than Universal Logistics. It trades about 0.11 of its potential returns per unit of risk. Universal Logistics Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,375 in Universal Logistics Holdings on November 2, 2024 and sell it today you would earn a total of 184.00 from holding Universal Logistics Holdings or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider National vs. Universal Logistics Holdings
Performance |
| Timeline |
| Schneider National |
| Universal Logistics |
Schneider National and Universal Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider National and Universal Logistics
The main advantage of trading using opposite Schneider National and Universal Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider National position performs unexpectedly, Universal Logistics 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 Universal Logistics will offset losses from the drop in Universal Logistics' long position.| Schneider National vs. Marten Transport | Schneider National vs. Heartland Express | Schneider National vs. Universal Logistics Holdings | Schneider National vs. Covenant Logistics Group, |
| Universal Logistics vs. Covenant Logistics Group, | Universal Logistics vs. Marten Transport | Universal Logistics vs. Midland States Bancorp | Universal Logistics vs. PC Connection |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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