Correlation Between European Metals and JB Hunt
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and JB Hunt Transport, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and JB Hunt.
Diversification Opportunities for European Metals and JB Hunt
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between European and 0J71 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and JB Hunt go up and down completely randomly.
Pair Corralation between European Metals and JB Hunt
Assuming the 90 days trading horizon European Metals Holdings is expected to generate 1.98 times more return on investment than JB Hunt. However, European Metals is 1.98 times more volatile than JB Hunt Transport. It trades about 0.11 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.02 per unit of risk. If you would invest 725.00 in European Metals Holdings on October 26, 2024 and sell it today you would earn a total of 50.00 from holding European Metals Holdings or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
European Metals Holdings vs. JB Hunt Transport
Performance |
| Timeline |
| European Metals Holdings |
| JB Hunt Transport |
European Metals and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and JB Hunt
The main advantage of trading using opposite European Metals and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Ferrexpo PLC | European Metals vs. Atalaya Mining |
| JB Hunt vs. Creo Medical Group | JB Hunt vs. Wheaton Precious Metals | JB Hunt vs. European Metals Holdings | JB Hunt vs. Charter Communications Cl |
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 Stocks Directory module to find actively traded stocks across global markets.
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