Correlation Between London Security and JB Hunt
Can any of the company-specific risk be diversified away by investing in both London Security 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 London Security and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between London Security Plc and JB Hunt Transport, you can compare the effects of market volatilities on London Security 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 London Security with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of London Security and JB Hunt.
Diversification Opportunities for London Security and JB Hunt
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between London and 0J71 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding London Security 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 London Security 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 London Security 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 London Security i.e., London Security and JB Hunt go up and down completely randomly.
Pair Corralation between London Security and JB Hunt
Assuming the 90 days trading horizon London Security Plc is expected to under-perform the JB Hunt. In addition to that, London Security is 1.0 times more volatile than JB Hunt Transport. It trades about -0.22 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.11 per unit of volatility. If you would invest 18,172 in JB Hunt Transport on September 3, 2024 and sell it today you would earn a total of 832.00 from holding JB Hunt Transport or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
London Security Plc vs. JB Hunt Transport
Performance |
| Timeline |
| London Security Plc |
| JB Hunt Transport |
London Security and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with London Security and JB Hunt
The main advantage of trading using opposite London Security and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London Security 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.| London Security vs. Griffin Mining | London Security vs. Lundin Mining Corp | London Security vs. Veolia Environnement VE | London Security vs. Caledonia Mining |
| JB Hunt vs. Taylor Maritime Investments | JB Hunt vs. Livermore Investments Group | JB Hunt vs. Austevoll Seafood ASA | JB Hunt vs. Bankers Investment Trust |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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