Correlation Between JB Hunt and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both JB Hunt and CNH Industrial 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 CNH Industrial 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 CNH Industrial NV, you can compare the effects of market volatilities on JB Hunt and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and CNH Industrial.
Diversification Opportunities for JB Hunt and CNH Industrial
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0J71 and CNH is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of JB Hunt i.e., JB Hunt and CNH Industrial go up and down completely randomly.
Pair Corralation between JB Hunt and CNH Industrial
Assuming the 90 days trading horizon JB Hunt is expected to generate 19.98 times less return on investment than CNH Industrial. But when comparing it to its historical volatility, JB Hunt Transport is 2.25 times less risky than CNH Industrial. It trades about 0.02 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,055 in CNH Industrial NV on October 26, 2024 and sell it today you would earn a total of 175.00 from holding CNH Industrial NV or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. CNH Industrial NV
Performance |
| Timeline |
| JB Hunt Transport |
| CNH Industrial NV |
JB Hunt and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and CNH Industrial
The main advantage of trading using opposite JB Hunt and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| JB Hunt vs. Creo Medical Group | JB Hunt vs. Wheaton Precious Metals | JB Hunt vs. European Metals Holdings | JB Hunt vs. Charter Communications Cl |
| CNH Industrial vs. Trainline Plc | CNH Industrial vs. MoneysupermarketCom Group PLC | CNH Industrial vs. National Beverage Corp | CNH Industrial vs. JB Hunt Transport |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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