Correlation Between Werner Enterprises and Marten Transport
Can any of the company-specific risk be diversified away by investing in both Werner Enterprises and Marten Transport 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 Werner Enterprises and Marten Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Werner Enterprises and Marten Transport, you can compare the effects of market volatilities on Werner Enterprises and Marten Transport 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 Werner Enterprises with a short position of Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Werner Enterprises and Marten Transport.
Diversification Opportunities for Werner Enterprises and Marten Transport
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Werner and Marten is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Werner Enterprises and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport and Werner Enterprises 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 Werner Enterprises are associated (or correlated) with Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of Werner Enterprises i.e., Werner Enterprises and Marten Transport go up and down completely randomly.
Pair Corralation between Werner Enterprises and Marten Transport
Given the investment horizon of 90 days Werner Enterprises is expected to generate 0.96 times more return on investment than Marten Transport. However, Werner Enterprises is 1.04 times less risky than Marten Transport. It trades about 0.01 of its potential returns per unit of risk. Marten Transport is currently generating about -0.04 per unit of risk. If you would invest 3,693 in Werner Enterprises on November 2, 2024 and sell it today you would lose (20.00) from holding Werner Enterprises or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Werner Enterprises vs. Marten Transport
Performance |
| Timeline |
| Werner Enterprises |
| Marten Transport |
Werner Enterprises and Marten Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Werner Enterprises and Marten Transport
The main advantage of trading using opposite Werner Enterprises and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Werner Enterprises position performs unexpectedly, Marten Transport 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 Marten Transport will offset losses from the drop in Marten Transport's long position.| Werner Enterprises vs. Heartland Express | Werner Enterprises vs. Universal Logistics Holdings | Werner Enterprises vs. Schneider National | Werner Enterprises vs. Marten Transport |
| Marten Transport vs. Werner Enterprises | Marten Transport vs. Covenant Logistics Group, | Marten Transport vs. Universal Logistics Holdings | Marten Transport vs. Schneider National |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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