Correlation Between JB Hunt and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Fresenius Medical 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 JB Hunt and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JB Hunt Transport and Fresenius Medical Care, you can compare the effects of market volatilities on JB Hunt and Fresenius Medical 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 JB Hunt with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Fresenius Medical.
Diversification Opportunities for JB Hunt and Fresenius Medical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0J71 and Fresenius is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and JB Hunt 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 JB Hunt Transport are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of JB Hunt i.e., JB Hunt and Fresenius Medical go up and down completely randomly.
Pair Corralation between JB Hunt and Fresenius Medical
Assuming the 90 days trading horizon JB Hunt is expected to generate 1.6 times less return on investment than Fresenius Medical. But when comparing it to its historical volatility, JB Hunt Transport is 1.05 times less risky than Fresenius Medical. It trades about 0.11 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,470 in Fresenius Medical Care on September 2, 2024 and sell it today you would earn a total of 681.00 from holding Fresenius Medical Care or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Fresenius Medical Care
Performance |
| Timeline |
| JB Hunt Transport |
| Fresenius Medical Care |
JB Hunt and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Fresenius Medical
The main advantage of trading using opposite JB Hunt and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| JB Hunt vs. Uniper SE | JB Hunt vs. Mulberry Group PLC | JB Hunt vs. London Security Plc | JB Hunt vs. Triad Group PLC |
| Fresenius Medical vs. Uniper SE | Fresenius Medical vs. Mulberry Group PLC | Fresenius Medical vs. London Security Plc | Fresenius Medical vs. Triad Group PLC |
Check out your portfolio center.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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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