Correlation Between JB Hunt and FC Investment
Can any of the company-specific risk be diversified away by investing in both JB Hunt and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on JB Hunt and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and FC Investment.
Diversification Opportunities for JB Hunt and FC Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0J71 and FCIT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of JB Hunt i.e., JB Hunt and FC Investment go up and down completely randomly.
Pair Corralation between JB Hunt and FC Investment
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the FC Investment. In addition to that, JB Hunt is 1.94 times more volatile than FC Investment Trust. It trades about -0.05 of its total potential returns per unit of risk. FC Investment Trust is currently generating about 0.27 per unit of volatility. If you would invest 113,000 in FC Investment Trust on November 5, 2024 and sell it today you would earn a total of 5,800 from holding FC Investment Trust or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. FC Investment Trust
Performance |
| Timeline |
| JB Hunt Transport |
| FC Investment Trust |
JB Hunt and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and FC Investment
The main advantage of trading using opposite JB Hunt and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.The idea behind JB Hunt Transport and FC Investment Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FC Investment vs. JD Sports Fashion | FC Investment vs. Cairo Communication SpA | FC Investment vs. Mobius Investment Trust | FC Investment vs. Lowland Investment Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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