Correlation Between JB Hunt and Molson Coors
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Molson Coors 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 Molson Coors 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 Molson Coors Beverage, you can compare the effects of market volatilities on JB Hunt and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Molson Coors.
Diversification Opportunities for JB Hunt and Molson Coors
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0J71 and Molson is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of JB Hunt i.e., JB Hunt and Molson Coors go up and down completely randomly.
Pair Corralation between JB Hunt and Molson Coors
Assuming the 90 days trading horizon JB Hunt is expected to generate 2.46 times less return on investment than Molson Coors. In addition to that, JB Hunt is 1.21 times more volatile than Molson Coors Beverage. It trades about 0.1 of its total potential returns per unit of risk. Molson Coors Beverage is currently generating about 0.29 per unit of volatility. If you would invest 5,573 in Molson Coors Beverage on September 4, 2024 and sell it today you would earn a total of 620.00 from holding Molson Coors Beverage or generate 11.13% 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. Molson Coors Beverage
Performance |
| Timeline |
| JB Hunt Transport |
| Molson Coors Beverage |
JB Hunt and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Molson Coors
The main advantage of trading using opposite JB Hunt and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Hyundai Motor | JB Hunt vs. Toyota Motor Corp |
| Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Samsung Electronics Co | Molson Coors vs. Hyundai Motor | Molson Coors vs. Toyota Motor Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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