Correlation Between JB Hunt and Home Depot
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Home Depot 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 Home Depot 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 The Home Depot, you can compare the effects of market volatilities on JB Hunt and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Home Depot.
Diversification Opportunities for JB Hunt and Home Depot
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between J1BH34 and Home is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of JB Hunt i.e., JB Hunt and Home Depot go up and down completely randomly.
Pair Corralation between JB Hunt and Home Depot
If you would invest 8,690 in The Home Depot on October 24, 2024 and sell it today you would earn a total of 326.00 from holding The Home Depot or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. The Home Depot
Performance |
| Timeline |
| JB Hunt Transport |
| Home Depot |
JB Hunt and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Home Depot
The main advantage of trading using opposite JB Hunt and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| JB Hunt vs. Taiwan Semiconductor Manufacturing | JB Hunt vs. Apple Inc | JB Hunt vs. Alibaba Group Holding | JB Hunt vs. Microsoft |
| Home Depot vs. Verizon Communications | Home Depot vs. Prudential Financial | Home Depot vs. United Natural Foods, | Home Depot vs. Discover Financial Services |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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