Correlation Between JB Hunt and Empire Metals
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Empire Metals 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 Empire Metals 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 Empire Metals Limited, you can compare the effects of market volatilities on JB Hunt and Empire Metals 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Empire Metals.
Diversification Opportunities for JB Hunt and Empire Metals
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0J71 and Empire is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of JB Hunt i.e., JB Hunt and Empire Metals go up and down completely randomly.
Pair Corralation between JB Hunt and Empire Metals
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Empire Metals. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 2.88 times less risky than Empire Metals. The stock trades about -0.11 of its potential returns per unit of risk. The Empire Metals Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Empire Metals Limited on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Empire Metals Limited or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Empire Metals Limited
Performance |
| Timeline |
| JB Hunt Transport |
| Empire Metals Limited |
JB Hunt and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Empire Metals
The main advantage of trading using opposite JB Hunt and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| JB Hunt vs. Nordic Semiconductor ASA | JB Hunt vs. Silvercorp Metals | JB Hunt vs. Jacquet Metal Service | JB Hunt vs. Elmos Semiconductor SE |
| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Ferrexpo PLC | Empire Metals vs. Atalaya 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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