Correlation Between Henderson High and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Henderson High 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 Henderson High and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson High Income and JB Hunt Transport, you can compare the effects of market volatilities on Henderson High 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 Henderson High with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson High and JB Hunt.
Diversification Opportunities for Henderson High and JB Hunt
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Henderson and 0J71 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Henderson High Income 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 Henderson High 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 Henderson High Income 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 Henderson High i.e., Henderson High and JB Hunt go up and down completely randomly.
Pair Corralation between Henderson High and JB Hunt
Assuming the 90 days trading horizon Henderson High Income is expected to generate 0.49 times more return on investment than JB Hunt. However, Henderson High Income is 2.05 times less risky than JB Hunt. It trades about 0.15 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.23 per unit of risk. If you would invest 16,275 in Henderson High Income on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Henderson High Income or generate 2.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Henderson High Income vs. JB Hunt Transport
Performance |
Timeline |
Henderson High Income |
JB Hunt Transport |
Henderson High and JB Hunt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Henderson High and JB Hunt
The main advantage of trading using opposite Henderson High and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson High 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.Henderson High vs. Blackstone Loan Financing | Henderson High vs. JLEN Environmental Assets | Henderson High vs. Gear4music Plc | Henderson High vs. Ironveld Plc |
JB Hunt vs. GreenX Metals | JB Hunt vs. Panther Metals PLC | JB Hunt vs. Empire Metals Limited | JB Hunt vs. Central Asia 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |