Correlation Between Universal Logistics and Marten Transport
Can any of the company-specific risk be diversified away by investing in both Universal Logistics 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 Universal Logistics and Marten Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Logistics Holdings and Marten Transport, you can compare the effects of market volatilities on Universal Logistics 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 Universal Logistics with a short position of Marten Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Logistics and Marten Transport.
Diversification Opportunities for Universal Logistics and Marten Transport
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Marten is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Universal Logistics Holdings and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport and Universal Logistics 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 Universal Logistics Holdings 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 Universal Logistics i.e., Universal Logistics and Marten Transport go up and down completely randomly.
Pair Corralation between Universal Logistics and Marten Transport
Considering the 90-day investment horizon Universal Logistics Holdings is expected to generate 5.0 times more return on investment than Marten Transport. However, Universal Logistics is 5.0 times more volatile than Marten Transport. It trades about 0.14 of its potential returns per unit of risk. Marten Transport is currently generating about -0.05 per unit of risk. If you would invest 3,463 in Universal Logistics Holdings on February 5, 2024 and sell it today you would earn a total of 790.00 from holding Universal Logistics Holdings or generate 22.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Universal Logistics Holdings vs. Marten Transport
Performance |
Timeline |
Universal Logistics |
Marten Transport |
Universal Logistics and Marten Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Universal Logistics and Marten Transport
The main advantage of trading using opposite Universal Logistics and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Logistics 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.Universal Logistics vs. PAM Transportation Services | Universal Logistics vs. Covenant Logistics Group | Universal Logistics vs. Marten Transport | Universal Logistics vs. Midland States Bancorp |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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