Correlation Between JB Hunt and GoldMining
Can any of the company-specific risk be diversified away by investing in both JB Hunt and GoldMining 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 GoldMining 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 GoldMining, you can compare the effects of market volatilities on JB Hunt and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and GoldMining.
Diversification Opportunities for JB Hunt and GoldMining
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0J71 and GoldMining is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of JB Hunt i.e., JB Hunt and GoldMining go up and down completely randomly.
Pair Corralation between JB Hunt and GoldMining
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.58 times more return on investment than GoldMining. However, JB Hunt Transport is 1.72 times less risky than GoldMining. It trades about 0.08 of its potential returns per unit of risk. GoldMining is currently generating about -0.01 per unit of risk. If you would invest 17,226 in JB Hunt Transport on August 26, 2024 and sell it today you would earn a total of 961.00 from holding JB Hunt Transport or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
JB Hunt Transport vs. GoldMining
Performance |
| Timeline |
| JB Hunt Transport |
| GoldMining |
JB Hunt and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and GoldMining
The main advantage of trading using opposite JB Hunt and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| JB Hunt vs. Wheaton Precious Metals | JB Hunt vs. Neometals | JB Hunt vs. Baker Steel Resources | JB Hunt vs. Veolia Environnement VE |
| GoldMining vs. JB Hunt Transport | GoldMining vs. Veolia Environnement VE | GoldMining vs. Ironveld Plc | GoldMining vs. Schroders Investment Trusts |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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