Correlation Between Auction Technology and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and JB Hunt Transport, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and JB Hunt.
Diversification Opportunities for Auction Technology and JB Hunt
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auction and 0J71 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology 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 Auction Technology 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 Auction Technology 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 Auction Technology i.e., Auction Technology and JB Hunt go up and down completely randomly.
Pair Corralation between Auction Technology and JB Hunt
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 1.59 times more return on investment than JB Hunt. However, Auction Technology is 1.59 times more volatile than JB Hunt Transport. It trades about 0.03 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.04 per unit of risk. If you would invest 53,300 in Auction Technology Group on November 3, 2024 and sell it today you would earn a total of 8,500 from holding Auction Technology Group or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. JB Hunt Transport
Performance |
| Timeline |
| Auction Technology |
| JB Hunt Transport |
Auction Technology and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and JB Hunt
The main advantage of trading using opposite Auction Technology and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. Public Storage | Auction Technology vs. Spotify Technology SA | Auction Technology vs. Axway Software SA | Auction Technology vs. Alliance Data Systems |
| JB Hunt vs. Hecla Mining Co | JB Hunt vs. Thor Mining PLC | JB Hunt vs. Fortuna Silver Mines | JB Hunt vs. Silver Bullet Data |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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