Correlation Between Yellow Corp and Schneider National

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

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

Diversification Opportunities for Yellow Corp and Schneider National

-0.61

Correlation Coefficient

Yellow Corp  Schneider National

Excellent diversification

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

Pair Corralation between Yellow Corp and Schneider National

If you would invest  2,856  in Schneider National on September 19, 2024 and sell it today you would earn a total of  152.00  from holding Schneider National or generate 5.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Yellow Corp  vs.  Schneider National

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.

Schneider National

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider National are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Schneider National is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Yellow Corp and Schneider National

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

The idea behind Yellow Corp and Schneider National 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.