Correlation Between New Oriental and JB Hunt
Can any of the company-specific risk be diversified away by investing in both New Oriental 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 New Oriental and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Oriental Education and JB Hunt Transport, you can compare the effects of market volatilities on New Oriental 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 New Oriental with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and JB Hunt.
Diversification Opportunities for New Oriental and JB Hunt
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and J1BH34 is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education 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 New Oriental 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 New Oriental Education 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 New Oriental i.e., New Oriental and JB Hunt go up and down completely randomly.
Pair Corralation between New Oriental and JB Hunt
Assuming the 90 days trading horizon New Oriental Education is expected to generate 3.07 times more return on investment than JB Hunt. However, New Oriental is 3.07 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 0.01 per unit of risk. If you would invest 1,422 in New Oriental Education on October 25, 2024 and sell it today you would earn a total of 408.00 from holding New Oriental Education or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
New Oriental Education vs. JB Hunt Transport
Performance |
| Timeline |
| New Oriental Education |
| JB Hunt Transport |
New Oriental and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Oriental and JB Hunt
The main advantage of trading using opposite New Oriental and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental 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.| New Oriental vs. MAHLE Metal Leve | New Oriental vs. salesforce inc | New Oriental vs. Citizens Financial Group, | New Oriental vs. Nordon Indstrias Metalrgicas |
| JB Hunt vs. Annaly Capital Management, | JB Hunt vs. Guidewire Software, | JB Hunt vs. Automatic Data Processing | JB Hunt vs. Zoom Video Communications |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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