Correlation Between Inchcape PLC and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Inchcape PLC 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 Inchcape PLC and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inchcape PLC and JB Hunt Transport, you can compare the effects of market volatilities on Inchcape PLC 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 Inchcape PLC with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inchcape PLC and JB Hunt.
Diversification Opportunities for Inchcape PLC and JB Hunt
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inchcape and 0J71 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inchcape PLC 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 Inchcape PLC 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 Inchcape PLC 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 Inchcape PLC i.e., Inchcape PLC and JB Hunt go up and down completely randomly.
Pair Corralation between Inchcape PLC and JB Hunt
Assuming the 90 days trading horizon Inchcape PLC is expected to generate 0.99 times more return on investment than JB Hunt. However, Inchcape PLC is 1.01 times less risky than JB Hunt. It trades about 0.02 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.0 per unit of risk. If you would invest 72,995 in Inchcape PLC on September 12, 2024 and sell it today you would earn a total of 4,655 from holding Inchcape PLC or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Inchcape PLC vs. JB Hunt Transport
Performance |
| Timeline |
| Inchcape PLC |
| JB Hunt Transport |
Inchcape PLC and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inchcape PLC and JB Hunt
The main advantage of trading using opposite Inchcape PLC and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inchcape PLC 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.| Inchcape PLC vs. JB Hunt Transport | Inchcape PLC vs. CAP LEASE AVIATION | Inchcape PLC vs. Roadside Real Estate | Inchcape PLC vs. International Biotechnology Trust |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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