Correlation Between Central Asia and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and JB Hunt Transport, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and JB Hunt.
Diversification Opportunities for Central Asia and JB Hunt
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Central and 0J71 is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals 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 Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and JB Hunt go up and down completely randomly.
Pair Corralation between Central Asia and JB Hunt
Assuming the 90 days trading horizon Central Asia Metals is expected to generate 0.82 times more return on investment than JB Hunt. However, Central Asia Metals is 1.22 times less risky than JB Hunt. It trades about 0.12 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.21 per unit of risk. If you would invest 16,280 in Central Asia Metals on September 13, 2024 and sell it today you would earn a total of 520.00 from holding Central Asia Metals or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. JB Hunt Transport
Performance |
| Timeline |
| Central Asia Metals |
| JB Hunt Transport |
Central Asia and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and JB Hunt
The main advantage of trading using opposite Central Asia and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. Ashtead Technology Holdings | Central Asia vs. L3Harris Technologies | Central Asia vs. Roper Technologies | Central Asia vs. Alliance Data Systems |
| JB Hunt vs. Empire Metals Limited | JB Hunt vs. McEwen Mining | JB Hunt vs. AMG Advanced Metallurgical | JB Hunt vs. GreenX Metals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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