Correlation Between JB Hunt and Eagle Eye

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

Diversification Opportunities for JB Hunt and Eagle Eye

0.03

Correlation Coefficient

JB Hunt  Eagle Eye

Significant diversification

The 3 months correlation between 0J71 and Eagle is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Eagle Eye Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Eye Solutions 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 Eagle Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Eye Solutions has no effect on the direction of JB Hunt i.e., JB Hunt and Eagle Eye go up and down completely randomly.

Pair Corralation between JB Hunt and Eagle Eye

Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.81 times more return on investment than Eagle Eye. However, JB Hunt is 1.81 times more volatile than Eagle Eye Solutions. It trades about 0.07 of its potential returns per unit of risk. Eagle Eye Solutions is currently generating about 0.02 per unit of risk. If you would invest  16,806  in JB Hunt Transport on September 16, 2024 and sell it today you would earn a total of  1,219  from holding JB Hunt Transport or generate 7.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JB Hunt Transport  vs.  Eagle Eye Solutions

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 January 2025.

Eagle Eye Solutions

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Eye Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Eagle Eye is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JB Hunt and Eagle Eye

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

The idea behind JB Hunt Transport and Eagle Eye Solutions 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.