Correlation Between JB Hunt and Polar Capital
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on JB Hunt and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Polar Capital.
Diversification Opportunities for JB Hunt and Polar Capital
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 0J71 and Polar is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of JB Hunt i.e., JB Hunt and Polar Capital go up and down completely randomly.
Pair Corralation between JB Hunt and Polar Capital
Assuming the 90 days trading horizon JB Hunt is expected to generate 1.26 times less return on investment than Polar Capital. In addition to that, JB Hunt is 1.32 times more volatile than Polar Capital Technology. It trades about 0.12 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.2 per unit of volatility. If you would invest 30,520 in Polar Capital Technology on September 8, 2024 and sell it today you would earn a total of 3,730 from holding Polar Capital Technology or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Polar Capital Technology
Performance |
| Timeline |
| JB Hunt Transport |
| Polar Capital Technology |
JB Hunt and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Polar Capital
The main advantage of trading using opposite JB Hunt and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| JB Hunt vs. Lendinvest PLC | JB Hunt vs. Neometals | JB Hunt vs. Coor Service Management | JB Hunt vs. Albion Technology General |
| Polar Capital vs. Lendinvest PLC | Polar Capital vs. Neometals | Polar Capital vs. Coor Service Management | Polar Capital vs. Albion Technology General |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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