Correlation Between JB Hunt and Chrysalis Investments

Can any of the company-specific risk be diversified away by investing in both JB Hunt and Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments, you can compare the effects of market volatilities on JB Hunt and Chrysalis Investments 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 Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Chrysalis Investments.

Diversification Opportunities for JB Hunt and Chrysalis Investments

-0.52

Correlation Coefficient

JB Hunt  Chrysalis Investments

Excellent diversification

The 3 months correlation between 0J71 and Chrysalis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of JB Hunt i.e., JB Hunt and Chrysalis Investments go up and down completely randomly.

Pair Corralation between JB Hunt and Chrysalis Investments

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Chrysalis Investments. In addition to that, JB Hunt is 1.26 times more volatile than Chrysalis Investments. It trades about -0.02 of its total potential returns per unit of risk. Chrysalis Investments is currently generating about 0.1 per unit of volatility. If you would invest  8,800  in Chrysalis Investments on October 26, 2024 and sell it today you would earn a total of  710.00  from holding Chrysalis Investments or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

JB Hunt Transport  vs.  Chrysalis Investments

JB Hunt Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JB Hunt Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JB Hunt is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chrysalis Investments

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JB Hunt and Chrysalis Investments

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

The idea behind JB Hunt Transport and Chrysalis Investments 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.

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