Correlation Between JB Hunt and Charter Communications
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Charter Communications 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 Charter Communications 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 Charter Communications Cl, you can compare the effects of market volatilities on JB Hunt and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Charter Communications.
Diversification Opportunities for JB Hunt and Charter Communications
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 0J71 and Charter is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Charter Communications Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of JB Hunt i.e., JB Hunt and Charter Communications go up and down completely randomly.
Pair Corralation between JB Hunt and Charter Communications
Assuming the 90 days trading horizon JB Hunt is expected to generate 1.4 times less return on investment than Charter Communications. But when comparing it to its historical volatility, JB Hunt Transport is 1.32 times less risky than Charter Communications. It trades about 0.03 of its potential returns per unit of risk. Charter Communications Cl is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 33,064 in Charter Communications Cl on September 2, 2024 and sell it today you would earn a total of 6,331 from holding Charter Communications Cl or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.06% |
| Values | Daily Returns |
JB Hunt Transport vs. Charter Communications Cl
Performance |
| Timeline |
| JB Hunt Transport |
| Charter Communications |
JB Hunt and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Charter Communications
The main advantage of trading using opposite JB Hunt and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' 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 |
| Charter Communications vs. Uniper SE | Charter Communications vs. Mulberry Group PLC | Charter Communications vs. London Security Plc | Charter Communications 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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