Correlation Between JB Hunt and Trainline Plc
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Trainline 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 Trainline 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 Trainline Plc, you can compare the effects of market volatilities on JB Hunt and Trainline 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 Trainline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Trainline Plc.
Diversification Opportunities for JB Hunt and Trainline Plc
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0J71 and Trainline is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Trainline Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainline 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 Trainline Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainline Plc has no effect on the direction of JB Hunt i.e., JB Hunt and Trainline Plc go up and down completely randomly.
Pair Corralation between JB Hunt and Trainline Plc
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.97 times more return on investment than Trainline Plc. However, JB Hunt Transport is 1.03 times less risky than Trainline Plc. It trades about -0.1 of its potential returns per unit of risk. Trainline Plc is currently generating about -0.2 per unit of risk. If you would invest 18,290 in JB Hunt Transport on October 11, 2024 and sell it today you would lose (594.00) from holding JB Hunt Transport or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
JB Hunt Transport vs. Trainline Plc
Performance |
| Timeline |
| JB Hunt Transport |
| Trainline Plc |
JB Hunt and Trainline Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Trainline Plc
The main advantage of trading using opposite JB Hunt and Trainline Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Trainline 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 Trainline Plc will offset losses from the drop in Trainline Plc's long position.| JB Hunt vs. Tyson Foods Cl | JB Hunt vs. Dairy Farm International | JB Hunt vs. Indutrade AB | JB Hunt vs. Norwegian Air Shuttle |
| Trainline Plc vs. HCA Healthcare | Trainline Plc vs. Induction Healthcare Group | Trainline Plc vs. Raymond James Financial | Trainline Plc vs. Discover Financial Services |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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