Correlation Between Schneider National and Yellow Corp

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

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

Diversification Opportunities for Schneider National and Yellow Corp

-0.61

Correlation Coefficient

Schneider National  Yellow Corp

Excellent diversification

The 3 months correlation between Schneider and Yellow is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Schneider National and Yellow Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Corp and Schneider National 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 Schneider National are associated (or correlated) with Yellow Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Corp has no effect on the direction of Schneider National i.e., Schneider National and Yellow Corp go up and down completely randomly.

Pair Corralation between Schneider National and Yellow Corp

If you would invest  2,856  in Schneider National on September 19, 2024 and sell it today you would earn a total of  175.50  from holding Schneider National or generate 6.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Schneider National  vs.  Yellow Corp

Schneider National

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider National are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Schneider National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yellow Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yellow Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Yellow Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Schneider National and Yellow Corp

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

The idea behind Schneider National and Yellow Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.