Correlation Between Aterian and Saia

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

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

Diversification Opportunities for Aterian and Saia

-0.35

Correlation Coefficient

Aterian  Saia

Very good diversification

The 3 months correlation between Aterian and Saia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc and Aterian 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 Aterian 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 Aterian i.e., Aterian and Saia go up and down completely randomly.

Pair Corralation between Aterian and Saia

Given the investment horizon of 90 days Aterian is expected to under-perform the Saia. But the stock apears to be less risky and, when comparing its historical volatility, Aterian is 1.06 times less risky than Saia. The stock trades about -0.11 of its potential returns per unit of risk. The Saia Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  43,462  in Saia Inc on September 27, 2024 and sell it today you would earn a total of  4,141  from holding Saia Inc or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aterian  vs.  Saia Inc

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Saia Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Saia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aterian and Saia

The main advantage of trading using opposite Aterian and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian 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 Aterian 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.