Correlation Between Marten Transport and Saia

Can any of the company-specific risk be diversified away by investing in both Marten Transport and Saia 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 Marten Transport and Saia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marten Transport and Saia Inc, you can compare the effects of market volatilities on Marten Transport and Saia 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 Marten Transport with a short position of Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marten Transport and Saia.

Diversification Opportunities for Marten Transport and Saia

0.3

Correlation Coefficient

Marten Transport  Saia

Weak diversification

The 3 months correlation between Marten and Saia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Marten Transport and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and Marten Transport 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 Marten Transport are associated (or correlated) with Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Marten Transport i.e., Marten Transport and Saia go up and down completely randomly.

Pair Corralation between Marten Transport and Saia

Given the investment horizon of 90 days Marten Transport is expected to generate 8.77 times less return on investment than Saia. But when comparing it to its historical volatility, Marten Transport is 3.08 times less risky than Saia. It trades about 0.09 of its potential returns per unit of risk. Saia Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  39,326  in Saia Inc on March 7, 2024 and sell it today you would earn a total of  5,424  from holding Saia Inc or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Marten Transport  vs.  Saia Inc

Marten Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marten Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Marten Transport is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Saia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Marten Transport and Saia

The main advantage of trading using opposite Marten Transport and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marten Transport position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.

The idea behind Marten Transport and Saia Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.