Correlation Between JB Hunt and Bell Food
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on JB Hunt and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Bell Food.
Diversification Opportunities for JB Hunt and Bell Food
Modest diversification
The 3 months correlation between 0J71 and Bell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of JB Hunt i.e., JB Hunt and Bell Food go up and down completely randomly.
Pair Corralation between JB Hunt and Bell Food
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Bell Food. In addition to that, JB Hunt is 1.32 times more volatile than Bell Food Group. It trades about -0.12 of its total potential returns per unit of risk. Bell Food Group is currently generating about -0.07 per unit of volatility. If you would invest 26,350 in Bell Food Group on October 30, 2024 and sell it today you would lose (950.00) from holding Bell Food Group or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
JB Hunt Transport vs. Bell Food Group
Performance |
| Timeline |
| JB Hunt Transport |
| Bell Food Group |
JB Hunt and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Bell Food
The main advantage of trading using opposite JB Hunt and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| JB Hunt vs. Take Two Interactive Software | JB Hunt vs. Cognizant Technology Solutions | JB Hunt vs. Nordic Semiconductor ASA | JB Hunt vs. Tatton Asset Management |
| Bell Food vs. Ross Stores | Bell Food vs. EVS Broadcast Equipment | Bell Food vs. European Metals Holdings | Bell Food vs. Gaztransport et Technigaz |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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