Correlation Between Scandic Hotels and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels 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 Scandic Hotels and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandic Hotels Group and JB Hunt Transport, you can compare the effects of market volatilities on Scandic Hotels 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 Scandic Hotels with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and JB Hunt.
Diversification Opportunities for Scandic Hotels and JB Hunt
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scandic and 0J71 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group 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 Scandic Hotels 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 Scandic Hotels Group 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 Scandic Hotels i.e., Scandic Hotels and JB Hunt go up and down completely randomly.
Pair Corralation between Scandic Hotels and JB Hunt
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the JB Hunt. But the stock apears to be less risky and, when comparing its historical volatility, Scandic Hotels Group is 1.26 times less risky than JB Hunt. The stock trades about -0.23 of its potential returns per unit of risk. The JB Hunt Transport is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 17,914 in JB Hunt Transport on August 30, 2024 and sell it today you would earn a total of 1,099 from holding JB Hunt Transport or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. JB Hunt Transport
Performance |
| Timeline |
| Scandic Hotels Group |
| JB Hunt Transport |
Scandic Hotels and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and JB Hunt
The main advantage of trading using opposite Scandic Hotels and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels 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.| Scandic Hotels vs. Tungsten West PLC | Scandic Hotels vs. Argo Group Limited | Scandic Hotels vs. Hardide PLC | Scandic Hotels vs. Versarien PLC |
| JB Hunt vs. Tungsten West PLC | JB Hunt vs. Argo Group Limited | JB Hunt vs. Hardide PLC | JB Hunt vs. Versarien 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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