Correlation Between JB Hunt and Inchcape PLC
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Inchcape PLC 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 Inchcape PLC 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 Inchcape PLC, you can compare the effects of market volatilities on JB Hunt and Inchcape PLC 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 Inchcape PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Inchcape PLC.
Diversification Opportunities for JB Hunt and Inchcape PLC
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0J71 and Inchcape is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Inchcape PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inchcape 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 Inchcape PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inchcape PLC has no effect on the direction of JB Hunt i.e., JB Hunt and Inchcape PLC go up and down completely randomly.
Pair Corralation between JB Hunt and Inchcape PLC
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Inchcape PLC. In addition to that, JB Hunt is 1.26 times more volatile than Inchcape PLC. It trades about -0.21 of its total potential returns per unit of risk. Inchcape PLC is currently generating about 0.21 per unit of volatility. If you would invest 74,500 in Inchcape PLC on September 13, 2024 and sell it today you would earn a total of 3,950 from holding Inchcape PLC or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Inchcape PLC
Performance |
| Timeline |
| JB Hunt Transport |
| Inchcape PLC |
JB Hunt and Inchcape PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Inchcape PLC
The main advantage of trading using opposite JB Hunt and Inchcape PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Inchcape PLC 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 Inchcape PLC will offset losses from the drop in Inchcape PLC's long position.| JB Hunt vs. Empire Metals Limited | JB Hunt vs. McEwen Mining | JB Hunt vs. AMG Advanced Metallurgical | JB Hunt vs. GreenX Metals |
| Inchcape PLC vs. The Mercantile Investment | Inchcape PLC vs. Cairo Communication SpA | Inchcape PLC vs. Verizon Communications | Inchcape PLC vs. Infrastrutture Wireless Italiane |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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