Correlation Between JB Hunt and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Playtech 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 Playtech 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 Playtech Plc, you can compare the effects of market volatilities on JB Hunt and Playtech 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Playtech Plc.
Diversification Opportunities for JB Hunt and Playtech Plc
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0J71 and Playtech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech Plc has no effect on the direction of JB Hunt i.e., JB Hunt and Playtech Plc go up and down completely randomly.
Pair Corralation between JB Hunt and Playtech Plc
Assuming the 90 days trading horizon JB Hunt is expected to generate 3.1 times less return on investment than Playtech Plc. But when comparing it to its historical volatility, JB Hunt Transport is 1.11 times less risky than Playtech Plc. It trades about 0.02 of its potential returns per unit of risk. Playtech Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50,550 in Playtech Plc on September 5, 2024 and sell it today you would earn a total of 22,450 from holding Playtech Plc or generate 44.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.98% |
| Values | Daily Returns |
JB Hunt Transport vs. Playtech Plc
Performance |
| Timeline |
| JB Hunt Transport |
| Playtech Plc |
JB Hunt and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Playtech Plc
The main advantage of trading using opposite JB Hunt and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Playtech 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 Playtech Plc will offset losses from the drop in Playtech Plc's long position.| JB Hunt vs. Playtech Plc | JB Hunt vs. Orient Telecoms | JB Hunt vs. Gamma Communications PLC | JB Hunt vs. McEwen Mining |
| Playtech Plc vs. Samsung Electronics Co | Playtech Plc vs. Samsung Electronics Co | Playtech Plc vs. Hyundai Motor | Playtech Plc vs. Toyota Motor Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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