Correlation Between Plaza Centers and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Plaza Centers 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 Plaza Centers and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and JB Hunt Transport, you can compare the effects of market volatilities on Plaza Centers 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 Plaza Centers with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and JB Hunt.
Diversification Opportunities for Plaza Centers and JB Hunt
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plaza and 0J71 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV 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 Plaza Centers 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 Plaza Centers NV 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 Plaza Centers i.e., Plaza Centers and JB Hunt go up and down completely randomly.
Pair Corralation between Plaza Centers and JB Hunt
Assuming the 90 days trading horizon Plaza Centers NV is expected to under-perform the JB Hunt. In addition to that, Plaza Centers is 1.72 times more volatile than JB Hunt Transport. It trades about -0.21 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 18,120 in JB Hunt Transport on September 1, 2024 and sell it today you would earn a total of 884.00 from holding JB Hunt Transport or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Centers NV vs. JB Hunt Transport
Performance |
| Timeline |
| Plaza Centers NV |
| JB Hunt Transport |
Plaza Centers and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and JB Hunt
The main advantage of trading using opposite Plaza Centers and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers 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.| Plaza Centers vs. Impax Environmental Markets | Plaza Centers vs. Naked Wines plc | Plaza Centers vs. Beeks Trading | Plaza Centers vs. Lowland Investment Co |
| JB Hunt vs. Bankers Investment Trust | JB Hunt vs. Beeks Trading | JB Hunt vs. Leroy Seafood Group | JB Hunt vs. Hilton Food Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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