Correlation Between JB Hunt and Pinnacle West
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Pinnacle West 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 Pinnacle West 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 Pinnacle West Capital, you can compare the effects of market volatilities on JB Hunt and Pinnacle West 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 Pinnacle West. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Pinnacle West.
Diversification Opportunities for JB Hunt and Pinnacle West
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0J71 and Pinnacle is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Pinnacle West Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle West Capital 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 Pinnacle West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle West Capital has no effect on the direction of JB Hunt i.e., JB Hunt and Pinnacle West go up and down completely randomly.
Pair Corralation between JB Hunt and Pinnacle West
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Pinnacle West. In addition to that, JB Hunt is 1.39 times more volatile than Pinnacle West Capital. It trades about -0.2 of its total potential returns per unit of risk. Pinnacle West Capital is currently generating about -0.06 per unit of volatility. If you would invest 9,107 in Pinnacle West Capital on September 13, 2024 and sell it today you would lose (142.00) from holding Pinnacle West Capital or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
JB Hunt Transport vs. Pinnacle West Capital
Performance |
| Timeline |
| JB Hunt Transport |
| Pinnacle West Capital |
JB Hunt and Pinnacle West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Pinnacle West
The main advantage of trading using opposite JB Hunt and Pinnacle West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Pinnacle West 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 Pinnacle West will offset losses from the drop in Pinnacle West's long position.| JB Hunt vs. Nordic Semiconductor ASA | JB Hunt vs. Silvercorp Metals | JB Hunt vs. Jacquet Metal Service | JB Hunt vs. Elmos Semiconductor SE |
| Pinnacle West vs. Samsung Electronics Co | Pinnacle West vs. Samsung Electronics Co | Pinnacle West vs. Hyundai Motor | Pinnacle West vs. Reliance Industries Ltd |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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