Correlation Between JB Hunt and Freightos Limited
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Freightos Limited 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 Freightos Limited 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 Freightos Limited Ordinary, you can compare the effects of market volatilities on JB Hunt and Freightos Limited 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 Freightos Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Freightos Limited.
Diversification Opportunities for JB Hunt and Freightos Limited
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JBHT and Freightos is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Freightos Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightos Limited 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 Freightos Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightos Limited has no effect on the direction of JB Hunt i.e., JB Hunt and Freightos Limited go up and down completely randomly.
Pair Corralation between JB Hunt and Freightos Limited
Given the investment horizon of 90 days JB Hunt Transport is expected to generate 0.25 times more return on investment than Freightos Limited. However, JB Hunt Transport is 4.06 times less risky than Freightos Limited. It trades about -0.27 of its potential returns per unit of risk. Freightos Limited Ordinary is currently generating about -0.1 per unit of risk. If you would invest 16,119 in JB Hunt Transport on December 30, 2024 and sell it today you would lose (1,507) from holding JB Hunt Transport or give up 9.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Freightos Limited Ordinary
Performance |
| Timeline |
| JB Hunt Transport |
| Freightos Limited |
JB Hunt and Freightos Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Freightos Limited
The main advantage of trading using opposite JB Hunt and Freightos Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Freightos Limited 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 Freightos Limited will offset losses from the drop in Freightos Limited's long position.| JB Hunt vs. Forward Air | ||
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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