Correlation Between Trainline Plc and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Trainline Plc 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 Trainline Plc and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainline Plc and JB Hunt Transport, you can compare the effects of market volatilities on Trainline Plc 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 Trainline Plc with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainline Plc and JB Hunt.
Diversification Opportunities for Trainline Plc and JB Hunt
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trainline and 0J71 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Trainline 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 Trainline Plc 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 Trainline 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 Trainline Plc i.e., Trainline Plc and JB Hunt go up and down completely randomly.
Pair Corralation between Trainline Plc and JB Hunt
Assuming the 90 days trading horizon Trainline Plc is expected to under-perform the JB Hunt. In addition to that, Trainline Plc is 1.03 times more volatile than JB Hunt Transport. It trades about -0.2 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about -0.1 per unit of volatility. If you would invest 18,290 in JB Hunt Transport on October 11, 2024 and sell it today you would lose (594.00) from holding JB Hunt Transport or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Trainline Plc vs. JB Hunt Transport
Performance |
| Timeline |
| Trainline Plc |
| JB Hunt Transport |
Trainline Plc and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainline Plc and JB Hunt
The main advantage of trading using opposite Trainline Plc and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc 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.| Trainline Plc vs. HCA Healthcare | Trainline Plc vs. Induction Healthcare Group | Trainline Plc vs. Raymond James Financial | Trainline Plc vs. Discover Financial Services |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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