Correlation Between JB Hunt and Omega Healthcare
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Omega Healthcare 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 Omega Healthcare 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 Omega Healthcare Investors, you can compare the effects of market volatilities on JB Hunt and Omega Healthcare 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 Omega Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Omega Healthcare.
Diversification Opportunities for JB Hunt and Omega Healthcare
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0J71 and Omega is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of JB Hunt i.e., JB Hunt and Omega Healthcare go up and down completely randomly.
Pair Corralation between JB Hunt and Omega Healthcare
Assuming the 90 days trading horizon JB Hunt is expected to generate 48.52 times less return on investment than Omega Healthcare. But when comparing it to its historical volatility, JB Hunt Transport is 1.09 times less risky than Omega Healthcare. It trades about 0.0 of its potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Omega Healthcare Investors on October 11, 2024 and sell it today you would earn a total of 1,381 from holding Omega Healthcare Investors or generate 58.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.58% |
| Values | Daily Returns |
JB Hunt Transport vs. Omega Healthcare Investors
Performance |
| Timeline |
| JB Hunt Transport |
| Omega Healthcare Inv |
JB Hunt and Omega Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Omega Healthcare
The main advantage of trading using opposite JB Hunt and Omega Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Omega Healthcare 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 Omega Healthcare will offset losses from the drop in Omega Healthcare's long position.| JB Hunt vs. Tyson Foods Cl | JB Hunt vs. Dairy Farm International | JB Hunt vs. Indutrade AB | JB Hunt vs. Norwegian Air Shuttle |
| Omega Healthcare vs. Morgan Advanced Materials | Omega Healthcare vs. Gaztransport et Technigaz | Omega Healthcare vs. JB Hunt Transport | Omega Healthcare vs. EVS Broadcast Equipment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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