Correlation Between Medical Properties and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Medical Properties and JB Hunt 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 Medical Properties and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Properties Trust and JB Hunt Transport, you can compare the effects of market volatilities on Medical Properties and JB Hunt 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 Medical Properties with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and JB Hunt.
Diversification Opportunities for Medical Properties and JB Hunt
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and 0J71 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport and Medical Properties 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 Medical Properties Trust are associated (or correlated) with JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of Medical Properties i.e., Medical Properties and JB Hunt go up and down completely randomly.
Pair Corralation between Medical Properties and JB Hunt
Assuming the 90 days trading horizon Medical Properties is expected to generate 8.94 times less return on investment than JB Hunt. In addition to that, Medical Properties is 2.33 times more volatile than JB Hunt Transport. It trades about 0.01 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.11 per unit of volatility. If you would invest 17,035 in JB Hunt Transport on September 2, 2024 and sell it today you would earn a total of 1,969 from holding JB Hunt Transport or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. JB Hunt Transport
Performance |
| Timeline |
| Medical Properties Trust |
| JB Hunt Transport |
Medical Properties and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and JB Hunt
The main advantage of trading using opposite Medical Properties and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, JB Hunt 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 JB Hunt will offset losses from the drop in JB Hunt's long position.| Medical Properties vs. Uniper SE | Medical Properties vs. Mulberry Group PLC | Medical Properties vs. London Security Plc | Medical Properties vs. Triad Group PLC |
| JB Hunt vs. Uniper SE | JB Hunt vs. Mulberry Group PLC | JB Hunt vs. London Security Plc | JB Hunt vs. Triad Group PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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