Correlation Between SPX Corp and Knight Transportation

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

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

Diversification Opportunities for SPX Corp and Knight Transportation

0.01

Correlation Coefficient

SPX Corp  Knight Transportation

Significant diversification

The 3 months correlation between SPX and Knight is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPX Corp and Knight Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knight Transportation and SPX 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 SPX Corp are associated (or correlated) with Knight Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knight Transportation has no effect on the direction of SPX Corp i.e., SPX Corp and Knight Transportation go up and down completely randomly.

Pair Corralation between SPX Corp and Knight Transportation

Given the investment horizon of 90 days SPX Corp is expected to generate 3.89 times less return on investment than Knight Transportation. But when comparing it to its historical volatility, SPX Corp is 1.71 times less risky than Knight Transportation. It trades about 0.03 of its potential returns per unit of risk. Knight Transportation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,112  in Knight Transportation on August 1, 2025 and sell it today you would earn a total of  337.00  from holding Knight Transportation or generate 8.2% return on investment over 90 days.

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

SPX Corp  vs.  Knight Transportation

SPX Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPX Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SPX Corp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Knight Transportation

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Knight Transportation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Knight Transportation may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with SPX Corp and Knight Transportation

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

The idea behind SPX Corp and Knight Transportation 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.