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
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lindsell and 0J71 is -0.56. 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 Investment is expected to under-perform the JB Hunt. But the stock apears to be less risky and, when comparing its historical volatility, Lindsell Train Investment is 1.38 times less risky than JB Hunt. The stock trades about -0.24 of its potential returns per unit of risk. The JB Hunt Transport is currently generating about 0.11 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 100.0% |
| 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. SBM Offshore NV | Lindsell Train vs. Air Products Chemicals | Lindsell Train vs. Vienna Insurance Group | Lindsell Train vs. Thor Mining PLC |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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