Correlation Between Extra Space and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Extra Space 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 Extra Space and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and JB Hunt Transport, you can compare the effects of market volatilities on Extra Space 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 Extra Space with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and JB Hunt.
Diversification Opportunities for Extra Space and JB Hunt
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Extra and J1BH34 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage 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 Extra Space 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 Extra Space Storage 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 Extra Space i.e., Extra Space and JB Hunt go up and down completely randomly.
Pair Corralation between Extra Space and JB Hunt
If you would invest 2,792 in JB Hunt Transport on November 6, 2024 and sell it today you would earn a total of 0.00 from holding JB Hunt Transport or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. JB Hunt Transport
Performance |
| Timeline |
| Extra Space Storage |
| JB Hunt Transport |
Extra Space and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and JB Hunt
The main advantage of trading using opposite Extra Space and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space 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.| Extra Space vs. T Mobile | Extra Space vs. Check Point Software | Extra Space vs. Guidewire Software, | Extra Space vs. United Natural Foods, |
| JB Hunt vs. Check Point Software | JB Hunt vs. Martin Marietta Materials, | JB Hunt vs. Public Storage | JB Hunt vs. Applied Materials, |
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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