Correlation Between Lindsell Train and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Lindsell Train 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 Lindsell Train and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and JB Hunt Transport, you can compare the effects of market volatilities on Lindsell Train 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 Lindsell Train with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and JB Hunt.
Diversification Opportunities for Lindsell Train and JB Hunt
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lindsell and 0J71 is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment 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 Lindsell Train 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 Lindsell Train Investment 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 Lindsell Train i.e., Lindsell Train and JB Hunt go up and down completely randomly.
Pair Corralation between Lindsell Train and JB Hunt
Assuming the 90 days trading horizon Lindsell Train is expected to generate 1.09 times less return on investment than JB Hunt. In addition to that, Lindsell Train is 1.0 times more volatile than JB Hunt Transport. It trades about 0.04 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.04 per unit of volatility. If you would invest 16,162 in JB Hunt Transport on November 3, 2024 and sell it today you would earn a total of 1,264 from holding JB Hunt Transport or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lindsell Train Investment vs. JB Hunt Transport
Performance |
| Timeline |
| Lindsell Train Investment |
| JB Hunt Transport |
Lindsell Train and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindsell Train and JB Hunt
The main advantage of trading using opposite Lindsell Train and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train 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.| Lindsell Train vs. International Biotechnology Trust | Lindsell Train vs. Geely Automobile Holdings | Lindsell Train vs. Charter Communications Cl | Lindsell Train vs. Infrastrutture Wireless Italiane |
| JB Hunt vs. Naked Wines plc | JB Hunt vs. European Metals Holdings | JB Hunt vs. Atalaya Mining | JB Hunt vs. Endeavour Mining Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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