Correlation Between JB Hunt and MG Plc
Can any of the company-specific risk be diversified away by investing in both JB Hunt and MG 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 MG 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 MG Plc, you can compare the effects of market volatilities on JB Hunt and MG 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 MG Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and MG Plc.
Diversification Opportunities for JB Hunt and MG Plc
Excellent diversification
The 3 months correlation between 0J71 and MNG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of JB Hunt i.e., JB Hunt and MG Plc go up and down completely randomly.
Pair Corralation between JB Hunt and MG Plc
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.95 times more return on investment than MG Plc. However, JB Hunt is 1.95 times more volatile than MG Plc. It trades about 0.15 of its potential returns per unit of risk. MG Plc is currently generating about 0.01 per unit of risk. If you would invest 17,770 in JB Hunt Transport on August 28, 2024 and sell it today you would earn a total of 1,174 from holding JB Hunt Transport or generate 6.61% 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. MG Plc
Performance |
| Timeline |
| JB Hunt Transport |
| MG Plc |
JB Hunt and MG Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and MG Plc
The main advantage of trading using opposite JB Hunt and MG Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, MG 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 MG Plc will offset losses from the drop in MG Plc's long position.| JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Hyundai Motor | JB Hunt vs. Toyota Motor Corp |
| MG Plc vs. Silvercorp Metals | MG Plc vs. Ecclesiastical Insurance Office | MG Plc vs. Direct Line Insurance | MG Plc vs. AfriTin 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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