Correlation Between Travel Leisure and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Travel Leisure 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 Travel Leisure and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Travel Leisure Co and JB Hunt Transport, you can compare the effects of market volatilities on Travel Leisure 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 Travel Leisure with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travel Leisure and JB Hunt.
Diversification Opportunities for Travel Leisure and JB Hunt
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Travel and 0J71 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Travel Leisure Co 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 Travel Leisure 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 Travel Leisure Co 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 Travel Leisure i.e., Travel Leisure and JB Hunt go up and down completely randomly.
Pair Corralation between Travel Leisure and JB Hunt
Assuming the 90 days trading horizon Travel Leisure Co is expected to generate 3.11 times more return on investment than JB Hunt. However, Travel Leisure is 3.11 times more volatile than JB Hunt Transport. It trades about 0.02 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.1 per unit of risk. If you would invest 5,815 in Travel Leisure Co on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Travel Leisure Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Travel Leisure Co vs. JB Hunt Transport
Performance |
| Timeline |
| Travel Leisure |
| JB Hunt Transport |
Travel Leisure and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travel Leisure and JB Hunt
The main advantage of trading using opposite Travel Leisure and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travel Leisure 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.| Travel Leisure vs. Learning Technologies Group | Travel Leisure vs. Solstad Offshore ASA | Travel Leisure vs. Creo Medical Group | Travel Leisure vs. Concurrent Technologies Plc |
| JB Hunt vs. Deltex Medical Group | JB Hunt vs. Travel Leisure Co | JB Hunt vs. Abingdon Health Plc | JB Hunt vs. Medical Properties Trust |
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 Stocks Directory module to find actively traded stocks across global markets.
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