Correlation Between JB Hunt and Herald Investment
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Herald 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 Herald 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 Herald Investment Trust, you can compare the effects of market volatilities on JB Hunt and Herald 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 Herald Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Herald Investment.
Diversification Opportunities for JB Hunt and Herald Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0J71 and Herald is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of JB Hunt i.e., JB Hunt and Herald Investment go up and down completely randomly.
Pair Corralation between JB Hunt and Herald Investment
Assuming the 90 days trading horizon JB Hunt is expected to generate 1.48 times less return on investment than Herald Investment. In addition to that, JB Hunt is 1.7 times more volatile than Herald Investment Trust. It trades about 0.03 of its total potential returns per unit of risk. Herald Investment Trust is currently generating about 0.07 per unit of volatility. If you would invest 182,400 in Herald Investment Trust on September 1, 2024 and sell it today you would earn a total of 53,100 from holding Herald Investment Trust or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.08% |
| Values | Daily Returns |
JB Hunt Transport vs. Herald Investment Trust
Performance |
| Timeline |
| JB Hunt Transport |
| Herald Investment Trust |
JB Hunt and Herald Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Herald Investment
The main advantage of trading using opposite JB Hunt and Herald Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Herald 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 Herald Investment will offset losses from the drop in Herald Investment's long position.| JB Hunt vs. Bankers Investment Trust | JB Hunt vs. Beeks Trading | JB Hunt vs. Leroy Seafood Group | JB Hunt vs. Hilton Food Group |
| Herald Investment vs. Atalaya Mining | Herald Investment vs. Cardinal Health | Herald Investment vs. AfriTin Mining | Herald Investment vs. Bellevue Healthcare Trust |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |