Correlation Between JB Hunt and Athelney Trust

Can any of the company-specific risk be diversified away by investing in both JB Hunt and Athelney Trust 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 JB Hunt and Athelney Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JB Hunt Transport and Athelney Trust plc, you can compare the effects of market volatilities on JB Hunt and Athelney Trust 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 JB Hunt with a short position of Athelney Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Athelney Trust.

Diversification Opportunities for JB Hunt and Athelney Trust

0.07

Correlation Coefficient

JB Hunt  Athelney Trust

Significant diversification

The 3 months correlation between 0J71 and Athelney is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Athelney Trust plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athelney Trust plc and JB Hunt 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 JB Hunt Transport are associated (or correlated) with Athelney Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athelney Trust plc has no effect on the direction of JB Hunt i.e., JB Hunt and Athelney Trust go up and down completely randomly.

Pair Corralation between JB Hunt and Athelney Trust

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Athelney Trust. In addition to that, JB Hunt is 1.12 times more volatile than Athelney Trust plc. It trades about -0.1 of its total potential returns per unit of risk. Athelney Trust plc is currently generating about 0.24 per unit of volatility. If you would invest  17,500  in Athelney Trust plc on October 9, 2024 and sell it today you would earn a total of  1,000.00  from holding Athelney Trust plc or generate 5.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

JB Hunt Transport  vs.  Athelney Trust plc

JB Hunt Transport

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JB Hunt may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Athelney Trust plc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Athelney Trust plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Athelney Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JB Hunt and Athelney Trust

The main advantage of trading using opposite JB Hunt and Athelney Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Athelney Trust 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 Athelney Trust will offset losses from the drop in Athelney Trust's long position.

The idea behind JB Hunt Transport and Athelney Trust plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.