Correlation Between USA Truck and Heartland Express

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

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

Diversification Opportunities for USA Truck and Heartland Express

-0.49

Correlation Coefficient

USA Truck  Heartland Express

Very good diversification

The 3 months correlation between USA and Heartland is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding USA Truck and Heartland Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Express and USA Truck 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 USA Truck are associated (or correlated) with Heartland Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Express has no effect on the direction of USA Truck i.e., USA Truck and Heartland Express go up and down completely randomly.

Pair Corralation between USA Truck and Heartland Express

If you would invest  3,171  in USA Truck on January 25, 2024 and sell it today you would earn a total of  0.00  from holding USA Truck or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

USA Truck  vs.  Heartland Express

USA Truck

Risk-Adjusted Performance

0 of 100

Very Weak

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

Heartland Express

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heartland Express 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 essential indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with USA Truck and Heartland Express

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

The idea behind USA Truck and Heartland Express 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.