Correlation Between JB Hunt and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials Co, you can compare the effects of market volatilities on JB Hunt and Vulcan Materials 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 Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Vulcan Materials.
Diversification Opportunities for JB Hunt and Vulcan Materials
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 0J71 and Vulcan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Vulcan Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials 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 Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of JB Hunt i.e., JB Hunt and Vulcan Materials go up and down completely randomly.
Pair Corralation between JB Hunt and Vulcan Materials
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.1 times more return on investment than Vulcan Materials. However, JB Hunt is 1.1 times more volatile than Vulcan Materials Co. It trades about 0.11 of its potential returns per unit of risk. Vulcan Materials Co is currently generating about 0.11 per unit of risk. If you would invest 18,120 in JB Hunt Transport on September 1, 2024 and sell it today you would earn a total of 884.00 from holding JB Hunt Transport or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Vulcan Materials Co
Performance |
| Timeline |
| JB Hunt Transport |
| Vulcan Materials |
JB Hunt and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Vulcan Materials
The main advantage of trading using opposite JB Hunt and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| JB Hunt vs. Bankers Investment Trust | JB Hunt vs. Beeks Trading | JB Hunt vs. Leroy Seafood Group | JB Hunt vs. Hilton Food Group |
| Vulcan Materials vs. Aurora Investment Trust | Vulcan Materials vs. BW Offshore | Vulcan Materials vs. Schroders Investment Trusts | Vulcan Materials vs. Intuitive Investments Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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