Correlation Between JB Hunt and Global Opportunities

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

Diversification Opportunities for JB Hunt and Global Opportunities

-0.35

Correlation Coefficient

JB Hunt  Global Opportunities

Very good diversification

The 3 months correlation between 0J71 and Global is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Global Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunities 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 Global Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunities has no effect on the direction of JB Hunt i.e., JB Hunt and Global Opportunities go up and down completely randomly.

Pair Corralation between JB Hunt and Global Opportunities

Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.09 times more return on investment than Global Opportunities. However, JB Hunt is 1.09 times more volatile than Global Opportunities Trust. It trades about -0.12 of its potential returns per unit of risk. Global Opportunities Trust is currently generating about -0.16 per unit of risk. If you would invest  18,355  in JB Hunt Transport on October 10, 2024 and sell it today you would lose (689.00) from holding JB Hunt Transport or give up 3.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

JB Hunt Transport  vs.  Global Opportunities Trust

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.

Global Opportunities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Opportunities Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global Opportunities is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JB Hunt and Global Opportunities

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

The idea behind JB Hunt Transport and Global Opportunities Trust 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.