Correlation Between JB Hunt and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Electronic Arts 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 Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on JB Hunt and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Electronic Arts.
Diversification Opportunities for JB Hunt and Electronic Arts
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0J71 and Electronic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of JB Hunt i.e., JB Hunt and Electronic Arts go up and down completely randomly.
Pair Corralation between JB Hunt and Electronic Arts
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Electronic Arts. In addition to that, JB Hunt is 1.42 times more volatile than Electronic Arts. It trades about 0.0 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.03 per unit of volatility. If you would invest 12,616 in Electronic Arts on October 15, 2024 and sell it today you would earn a total of 1,605 from holding Electronic Arts or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.17% |
| Values | Daily Returns |
JB Hunt Transport vs. Electronic Arts
Performance |
| Timeline |
| JB Hunt Transport |
| Electronic Arts |
JB Hunt and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Electronic Arts
The main advantage of trading using opposite JB Hunt and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| JB Hunt vs. DFS Furniture PLC | JB Hunt vs. Schroders Investment Trusts | JB Hunt vs. Beazer Homes USA | JB Hunt vs. Tavistock Investments Plc |
| Electronic Arts vs. Batm Advanced Communications | Electronic Arts vs. Zoom Video Communications | Electronic Arts vs. SMA Solar Technology | Electronic Arts vs. MTI Wireless Edge |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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