Correlation Between Schneider National and XPO Logistics
Can any of the company-specific risk be diversified away by investing in both Schneider National and XPO 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 XPO 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 XPO Logistics, you can compare the effects of market volatilities on Schneider National and XPO 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 XPO Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider National and XPO Logistics.
Diversification Opportunities for Schneider National and XPO Logistics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Schneider and XPO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Schneider National and XPO Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XPO 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 XPO Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XPO Logistics has no effect on the direction of Schneider National i.e., Schneider National and XPO Logistics go up and down completely randomly.
Pair Corralation between Schneider National and XPO Logistics
Given the investment horizon of 90 days Schneider National is expected to generate 0.95 times more return on investment than XPO Logistics. However, Schneider National is 1.05 times less risky than XPO Logistics. It trades about 0.07 of its potential returns per unit of risk. XPO Logistics is currently generating about 0.03 per unit of risk. If you would invest 2,913 in Schneider National on November 3, 2024 and sell it today you would earn a total of 62.00 from holding Schneider National or generate 2.13% 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. XPO Logistics
Performance |
| Timeline |
| Schneider National |
| XPO Logistics |
Schneider National and XPO Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider National and XPO Logistics
The main advantage of trading using opposite Schneider National and XPO Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider National position performs unexpectedly, XPO 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 XPO Logistics will offset losses from the drop in XPO 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, |
| XPO Logistics vs. Knight Transportation | XPO Logistics vs. Schneider National | XPO Logistics vs. Heartland Express | XPO Logistics vs. Saia Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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