Correlation Between ArcBest Corp and Daseke

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

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

Diversification Opportunities for ArcBest Corp and Daseke

0.56

Correlation Coefficient

ArcBest Corp  Daseke

Very weak diversification

The 3 months correlation between ArcBest and Daseke is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ArcBest Corp and Daseke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daseke Inc and ArcBest 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 ArcBest Corp are associated (or correlated) with Daseke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daseke Inc has no effect on the direction of ArcBest Corp i.e., ArcBest Corp and Daseke go up and down completely randomly.

Pair Corralation between ArcBest Corp and Daseke

Given the investment horizon of 90 days ArcBest Corp is expected to generate 24.63 times more return on investment than Daseke. However, ArcBest Corp is 24.63 times more volatile than Daseke Inc. It trades about 0.07 of its potential returns per unit of risk. Daseke Inc is currently generating about 0.41 per unit of risk. If you would invest  13,585  in ArcBest Corp on January 24, 2024 and sell it today you would earn a total of  368.00  from holding ArcBest Corp or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	30.0%
Values	Daily Returns

ArcBest Corp  vs.  Daseke Inc

ArcBest Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ArcBest Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, ArcBest Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Daseke Inc

Risk-Adjusted Performance

0 of 100

Solid

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

Pair Trading with ArcBest Corp and Daseke

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

The idea behind ArcBest Corp and Daseke 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.