Correlation Between JB Hunt and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on JB Hunt and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Compagnie Plastic.
Diversification Opportunities for JB Hunt and Compagnie Plastic
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0J71 and Compagnie is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of JB Hunt i.e., JB Hunt and Compagnie Plastic go up and down completely randomly.
Pair Corralation between JB Hunt and Compagnie Plastic
Assuming the 90 days trading horizon JB Hunt is expected to generate 3.65 times less return on investment than Compagnie Plastic. But when comparing it to its historical volatility, JB Hunt Transport is 1.38 times less risky than Compagnie Plastic. It trades about 0.06 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 999.00 in Compagnie Plastic Omnium on November 3, 2024 and sell it today you would earn a total of 93.00 from holding Compagnie Plastic Omnium or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| JB Hunt Transport |
| Compagnie Plastic Omnium |
JB Hunt and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Compagnie Plastic
The main advantage of trading using opposite JB Hunt and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| JB Hunt vs. Hecla Mining Co | JB Hunt vs. Thor Mining PLC | JB Hunt vs. Fortuna Silver Mines | JB Hunt vs. Silver Bullet Data |
| Compagnie Plastic vs. Synchrony Financial | Compagnie Plastic vs. Universal Music Group | Compagnie Plastic vs. Concurrent Technologies Plc | Compagnie Plastic vs. Made Tech 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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