Correlation Between JB Hunt and One Media

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

Diversification Opportunities for JB Hunt and One Media

-0.55

Correlation Coefficient

JB Hunt  One Media

Excellent diversification

The 3 months correlation between 0J71 and One is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of JB Hunt i.e., JB Hunt and One Media go up and down completely randomly.

Pair Corralation between JB Hunt and One Media

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the One Media. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.53 times less risky than One Media. The stock trades about -0.03 of its potential returns per unit of risk. The One Media iP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  375.00  in One Media iP on October 27, 2024 and sell it today you would earn a total of  50.00  from holding One Media iP or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

JB Hunt Transport  vs.  One Media iP

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.

One Media iP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, One Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and One Media

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

The idea behind JB Hunt Transport and One Media iP 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.