Correlation Between JB Hunt and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Cairn Homes 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 Cairn Homes 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 Cairn Homes PLC, you can compare the effects of market volatilities on JB Hunt and Cairn Homes 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 Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Cairn Homes.
Diversification Opportunities for JB Hunt and Cairn Homes
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0J71 and Cairn is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC 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 Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of JB Hunt i.e., JB Hunt and Cairn Homes go up and down completely randomly.
Pair Corralation between JB Hunt and Cairn Homes
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Cairn Homes. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.1 times less risky than Cairn Homes. The stock trades about -0.1 of its potential returns per unit of risk. The Cairn Homes PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 18,240 in Cairn Homes PLC on October 11, 2024 and sell it today you would earn a total of 600.00 from holding Cairn Homes PLC or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
JB Hunt Transport vs. Cairn Homes PLC
Performance |
| Timeline |
| JB Hunt Transport |
| Cairn Homes PLC |
JB Hunt and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Cairn Homes
The main advantage of trading using opposite JB Hunt and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' 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 |
| Cairn Homes vs. HCA Healthcare | Cairn Homes vs. JB Hunt Transport | Cairn Homes vs. Omega Healthcare Investors | Cairn Homes vs. Coeur Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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