Correlation Between ArcBest Corp and Marten Transport

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

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

Diversification Opportunities for ArcBest Corp and Marten Transport

-0.47

Correlation Coefficient

ArcBest Corp  Marten Transport

Very good diversification

The 3 months correlation between ArcBest and Marten is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ArcBest Corp and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport 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 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 ArcBest Corp i.e., ArcBest Corp and Marten Transport go up and down completely randomly.

Pair Corralation between ArcBest Corp and Marten Transport

Given the investment horizon of 90 days ArcBest Corp is expected to generate 1.7 times more return on investment than Marten Transport. However, ArcBest Corp is 1.7 times more volatile than Marten Transport. It trades about 0.07 of its potential returns per unit of risk. Marten Transport is currently generating about -0.04 per unit of risk. If you would invest  9,123  in ArcBest Corp on January 26, 2024 and sell it today you would earn a total of  4,577  from holding ArcBest Corp or generate 50.17% return on investment over 90 days.

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

ArcBest Corp  vs.  Marten Transport

ArcBest Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ArcBest Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, ArcBest Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Marten Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marten Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ArcBest Corp and Marten Transport

The main advantage of trading using opposite ArcBest Corp and Marten Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcBest Corp 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.

The idea behind ArcBest Corp and Marten Transport 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.