Correlation Between Saia and Heartland Express

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

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

Diversification Opportunities for Saia and Heartland Express

0.31

Correlation Coefficient

Saia  Heartland Express

Weak diversification

The 3 months correlation between Saia and Heartland is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Heartland Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Express and Saia 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 Saia Inc are associated (or correlated) with Heartland Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Express has no effect on the direction of Saia i.e., Saia and Heartland Express go up and down completely randomly.

Pair Corralation between Saia and Heartland Express

Given the investment horizon of 90 days Saia Inc is expected to generate 1.64 times more return on investment than Heartland Express. However, Saia is 1.64 times more volatile than Heartland Express. It trades about 0.08 of its potential returns per unit of risk. Heartland Express is currently generating about -0.01 per unit of risk. If you would invest  17,186  in Saia Inc on March 8, 2024 and sell it today you would earn a total of  27,354  from holding Saia Inc or generate 159.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Saia Inc  vs.  Heartland Express

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.

Heartland Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heartland Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Heartland Express is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Saia and Heartland Express

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

The idea behind Saia Inc and Heartland Express 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.