Correlation Between JB Hunt and River
Can any of the company-specific risk be diversified away by investing in both JB Hunt and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on JB Hunt and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and River.
Diversification Opportunities for JB Hunt and River
Weak diversification
The 3 months correlation between 0J71 and River is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of JB Hunt i.e., JB Hunt and River go up and down completely randomly.
Pair Corralation between JB Hunt and River
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the River. In addition to that, JB Hunt is 1.22 times more volatile than River and Mercantile. It trades about -0.04 of its total potential returns per unit of risk. River and Mercantile is currently generating about 0.04 per unit of volatility. If you would invest 15,825 in River and Mercantile on November 3, 2024 and sell it today you would earn a total of 1,825 from holding River and Mercantile or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. River and Mercantile
Performance |
| Timeline |
| JB Hunt Transport |
| River and Mercantile |
JB Hunt and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and River
The main advantage of trading using opposite JB Hunt and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| JB Hunt vs. Hecla Mining Co | JB Hunt vs. Thor Mining PLC | JB Hunt vs. Fortuna Silver Mines | JB Hunt vs. Silver Bullet Data |
| River vs. Fidelity National Information | River vs. Datalogic | River vs. Creo Medical Group | River vs. Advanced Medical Solutions |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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