Correlation Between JB Hunt and Extra Space
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Extra Space 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 JB Hunt and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JB Hunt Transport and Extra Space Storage, you can compare the effects of market volatilities on JB Hunt and Extra Space 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 JB Hunt with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Extra Space.
Diversification Opportunities for JB Hunt and Extra Space
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between J1BH34 and Extra is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage and JB Hunt 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 JB Hunt Transport are associated (or correlated) with Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of JB Hunt i.e., JB Hunt and Extra Space go up and down completely randomly.
Pair Corralation between JB Hunt and Extra Space
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Extra Space. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 5.29 times less risky than Extra Space. The stock trades about -0.04 of its potential returns per unit of risk. The Extra Space Storage is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 23,279 in Extra Space Storage on November 3, 2024 and sell it today you would lose (292.00) from holding Extra Space Storage or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Extra Space Storage
Performance |
| Timeline |
| JB Hunt Transport |
| Extra Space Storage |
JB Hunt and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Extra Space
The main advantage of trading using opposite JB Hunt and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| JB Hunt vs. Taiwan Semiconductor Manufacturing | JB Hunt vs. Apple Inc | JB Hunt vs. Alibaba Group Holding | JB Hunt vs. Microsoft |
| Extra Space vs. American Airlines Group | Extra Space vs. Monster Beverage | Extra Space vs. Marfrig Global Foods | Extra Space vs. Annaly Capital Management, |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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