Correlation Between Covenant Logistics and Heartland Express

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

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

Diversification Opportunities for Covenant Logistics and Heartland Express

0.55

Correlation Coefficient

Covenant Logistics  Heartland Express

Very weak diversification

The 3 months correlation between Covenant and Heartland is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Covenant Logistics Group, and Heartland Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Express and Covenant Logistics 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 Covenant Logistics Group, 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 Covenant Logistics i.e., Covenant Logistics and Heartland Express go up and down completely randomly.

Pair Corralation between Covenant Logistics and Heartland Express

Given the investment horizon of 90 days Covenant Logistics Group, is expected to generate 0.89 times more return on investment than Heartland Express. However, Covenant Logistics Group, is 1.12 times less risky than Heartland Express. It trades about 0.11 of its potential returns per unit of risk. Heartland Express is currently generating about 0.01 per unit of risk. If you would invest  2,028  in Covenant Logistics Group, on May 6, 2025 and sell it today you would earn a total of  299.00  from holding Covenant Logistics Group, or generate 14.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Covenant Logistics Group,  vs.  Heartland Express

Covenant Logistics Group,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Covenant Logistics Group, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Covenant Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Heartland Express

Risk-Adjusted Performance

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 rather sound essential indicators, Heartland Express is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Covenant Logistics and Heartland Express

The main advantage of trading using opposite Covenant Logistics and Heartland Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covenant Logistics 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 Covenant Logistics Group, 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .