Correlation Between JB Hunt and Park Hotels
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on JB Hunt and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Park Hotels.
Diversification Opportunities for JB Hunt and Park Hotels
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0J71 and Park is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of JB Hunt i.e., JB Hunt and Park Hotels go up and down completely randomly.
Pair Corralation between JB Hunt and Park Hotels
Assuming the 90 days trading horizon JB Hunt is expected to generate 5.27 times less return on investment than Park Hotels. In addition to that, JB Hunt is 1.01 times more volatile than Park Hotels Resorts. It trades about 0.05 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.26 per unit of volatility. If you would invest 1,414 in Park Hotels Resorts on September 5, 2024 and sell it today you would earn a total of 173.00 from holding Park Hotels Resorts or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Park Hotels Resorts
Performance |
| Timeline |
| JB Hunt Transport |
| Park Hotels Resorts |
JB Hunt and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Park Hotels
The main advantage of trading using opposite JB Hunt and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| JB Hunt vs. Playtech Plc | JB Hunt vs. Orient Telecoms | JB Hunt vs. Gamma Communications PLC | JB Hunt vs. McEwen Mining |
| Park Hotels vs. Jacquet Metal Service | Park Hotels vs. Schroders Investment Trusts | Park Hotels vs. JB Hunt Transport | Park Hotels vs. Bisichi Mining 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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