Correlation Between Marten Transport and Steven Madden

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

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

Diversification Opportunities for Marten Transport and Steven Madden

0.45

Correlation Coefficient

Marten Transport  Steven Madden

Very weak diversification

The 3 months correlation between Marten and Steven is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Marten Transport and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and Marten Transport 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 Marten Transport are associated (or correlated) with Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Marten Transport i.e., Marten Transport and Steven Madden go up and down completely randomly.

Pair Corralation between Marten Transport and Steven Madden

Given the investment horizon of 90 days Marten Transport is expected to under-perform the Steven Madden. But the stock apears to be less risky and, when comparing its historical volatility, Marten Transport is 2.42 times less risky than Steven Madden. The stock trades about -0.04 of its potential returns per unit of risk. The Steven Madden is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,996  in Steven Madden on May 6, 2025 and sell it today you would earn a total of  514.00  from holding Steven Madden or generate 25.75% return on investment over 90 days.

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

Marten Transport  vs.  Steven Madden

Marten Transport

Risk-Adjusted Performance

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 very healthy basic indicators, Marten Transport is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Steven Madden

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Steven Madden are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Steven Madden displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marten Transport and Steven Madden

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

The idea behind Marten Transport and Steven Madden 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.