Correlation Between JB Hunt and Clean Power
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Clean Power 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 Clean Power 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 Clean Power Hydrogen, you can compare the effects of market volatilities on JB Hunt and Clean Power 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 Clean Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Clean Power.
Diversification Opportunities for JB Hunt and Clean Power
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0J71 and Clean is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Clean Power Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Power Hydrogen 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 Clean Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Power Hydrogen has no effect on the direction of JB Hunt i.e., JB Hunt and Clean Power go up and down completely randomly.
Pair Corralation between JB Hunt and Clean Power
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.21 times more return on investment than Clean Power. However, JB Hunt is 1.21 times more volatile than Clean Power Hydrogen. It trades about -0.1 of its potential returns per unit of risk. Clean Power Hydrogen is currently generating about -0.39 per unit of risk. If you would invest 18,290 in JB Hunt Transport on October 11, 2024 and sell it today you would lose (594.00) from holding JB Hunt Transport or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
JB Hunt Transport vs. Clean Power Hydrogen
Performance |
| Timeline |
| JB Hunt Transport |
| Clean Power Hydrogen |
JB Hunt and Clean Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Clean Power
The main advantage of trading using opposite JB Hunt and Clean Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Clean Power 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 Clean Power will offset losses from the drop in Clean Power's long position.| JB Hunt vs. Tyson Foods Cl | JB Hunt vs. Dairy Farm International | JB Hunt vs. Indutrade AB | JB Hunt vs. Norwegian Air Shuttle |
| Clean Power vs. JB Hunt Transport | Clean Power vs. Wizz Air Holdings | Clean Power vs. Automatic Data Processing | Clean Power vs. Rosslyn Data Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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