Correlation Between GoldMining and JB Hunt
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and JB Hunt Transport, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and JB Hunt.
Diversification Opportunities for GoldMining and JB Hunt
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoldMining and 0J71 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and JB Hunt go up and down completely randomly.
Pair Corralation between GoldMining and JB Hunt
Assuming the 90 days trading horizon GoldMining is expected to generate 1.77 times more return on investment than JB Hunt. However, GoldMining is 1.77 times more volatile than JB Hunt Transport. It trades about 0.05 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.09 per unit of risk. If you would invest 113.00 in GoldMining on August 28, 2024 and sell it today you would earn a total of 6.00 from holding GoldMining or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.69% |
| Values | Daily Returns |
GoldMining vs. JB Hunt Transport
Performance |
| Timeline |
| GoldMining |
| JB Hunt Transport |
GoldMining and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and JB Hunt
The main advantage of trading using opposite GoldMining and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
| JB Hunt vs. Systemair AB | JB Hunt vs. Pentair PLC | JB Hunt vs. Panther Metals PLC | JB Hunt vs. Anglesey Mining |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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