Correlation Between Anglo Asian and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Anglo Asian 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 Anglo Asian and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Asian Mining and JB Hunt Transport, you can compare the effects of market volatilities on Anglo Asian 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 Anglo Asian with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and JB Hunt.
Diversification Opportunities for Anglo Asian and JB Hunt
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and 0J71 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining 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 Anglo Asian 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 Anglo Asian Mining 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 Anglo Asian i.e., Anglo Asian and JB Hunt go up and down completely randomly.
Pair Corralation between Anglo Asian and JB Hunt
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 1.5 times more return on investment than JB Hunt. However, Anglo Asian is 1.5 times more volatile than JB Hunt Transport. It trades about 0.09 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.06 per unit of risk. If you would invest 10,400 in Anglo Asian Mining on November 3, 2024 and sell it today you would earn a total of 500.00 from holding Anglo Asian Mining or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. JB Hunt Transport
Performance |
| Timeline |
| Anglo Asian Mining |
| JB Hunt Transport |
Anglo Asian and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and JB Hunt
The main advantage of trading using opposite Anglo Asian and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian 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.| Anglo Asian vs. Ion Beam Applications | Anglo Asian vs. Various Eateries PLC | Anglo Asian vs. American Homes 4 | Anglo Asian vs. Fidelity National Information |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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