Correlation Between JB Hunt and Primorus Investments

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

Diversification Opportunities for JB Hunt and Primorus Investments

0.6

Correlation Coefficient

JB Hunt  Primorus Investments

Poor diversification

The 3 months correlation between 0J71 and Primorus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Primorus Investments plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primorus Investments 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 Primorus Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primorus Investments plc has no effect on the direction of JB Hunt i.e., JB Hunt and Primorus Investments go up and down completely randomly.

Pair Corralation between JB Hunt and Primorus Investments

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Primorus Investments. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 2.01 times less risky than Primorus Investments. The stock trades about -0.14 of its potential returns per unit of risk. The Primorus Investments plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  375.00  in Primorus Investments plc on December 23, 2024 and sell it today you would lose (15.00) from holding Primorus Investments plc or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

JB Hunt Transport  vs.  Primorus Investments plc

JB Hunt Transport

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Primorus Investments plc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with JB Hunt and Primorus Investments

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

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