Correlation Between Baker Steel and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Baker Steel 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 Baker Steel and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and JB Hunt Transport, you can compare the effects of market volatilities on Baker Steel 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 Baker Steel with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and JB Hunt.
Diversification Opportunities for Baker Steel and JB Hunt
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baker and 0J71 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources 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 Baker Steel 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 Baker Steel Resources 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 Baker Steel i.e., Baker Steel and JB Hunt go up and down completely randomly.
Pair Corralation between Baker Steel and JB Hunt
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 1.13 times more return on investment than JB Hunt. However, Baker Steel is 1.13 times more volatile than JB Hunt Transport. It trades about 0.34 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.14 per unit of risk. If you would invest 4,750 in Baker Steel Resources on August 30, 2024 and sell it today you would earn a total of 850.00 from holding Baker Steel Resources or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baker Steel Resources vs. JB Hunt Transport
Performance |
| Timeline |
| Baker Steel Resources |
| JB Hunt Transport |
Baker Steel and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and JB Hunt
The main advantage of trading using opposite Baker Steel and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel 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.| Baker Steel vs. Samsung Electronics Co | Baker Steel vs. Samsung Electronics Co | Baker Steel vs. Hyundai Motor | Baker Steel vs. Toyota Motor Corp |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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