Correlation Between JB Hunt and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on JB Hunt and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Arrow Electronics.
Diversification Opportunities for JB Hunt and Arrow Electronics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0J71 and Arrow is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of JB Hunt i.e., JB Hunt and Arrow Electronics go up and down completely randomly.
Pair Corralation between JB Hunt and Arrow Electronics
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.33 times more return on investment than Arrow Electronics. However, JB Hunt is 1.33 times more volatile than Arrow Electronics. It trades about 0.11 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.05 per unit of risk. If you would invest 18,172 in JB Hunt Transport on September 3, 2024 and sell it today you would earn a total of 832.00 from holding JB Hunt Transport or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Arrow Electronics
Performance |
| Timeline |
| JB Hunt Transport |
| Arrow Electronics |
JB Hunt and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Arrow Electronics
The main advantage of trading using opposite JB Hunt and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| JB Hunt vs. Taylor Maritime Investments | JB Hunt vs. Livermore Investments Group | JB Hunt vs. Austevoll Seafood ASA | JB Hunt vs. Bankers Investment Trust |
| Arrow Electronics vs. Indutrade AB | Arrow Electronics vs. Ameriprise Financial | Arrow Electronics vs. Erste Group Bank | Arrow Electronics vs. Discover Financial Services |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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