Correlation Between Abingdon Health and JB Hunt

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Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and JB Hunt Transport, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and JB Hunt.

Diversification Opportunities for Abingdon Health and JB Hunt

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Abingdon and 0J71 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc 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 Abingdon Health 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and JB Hunt go up and down completely randomly.

Pair Corralation between Abingdon Health and JB Hunt

Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 1.32 times more return on investment than JB Hunt. However, Abingdon Health is 1.32 times more volatile than JB Hunt Transport. It trades about 0.19 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  750.00  in Abingdon Health Plc on October 14, 2024 and sell it today you would earn a total of  50.00  from holding Abingdon Health Plc or generate 6.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.0%
ValuesDaily Returns

Abingdon Health Plc  vs.  JB Hunt Transport

 Performance 
       Timeline  
Abingdon Health Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JB Hunt Transport 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JB Hunt is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Abingdon Health and JB Hunt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abingdon Health and JB Hunt

The main advantage of trading using opposite Abingdon Health and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.
The idea behind Abingdon Health Plc and JB Hunt Transport pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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