Correlation Between JB Hunt and John Wood
Can any of the company-specific risk be diversified away by investing in both JB Hunt and John Wood 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 John Wood 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 John Wood Group, you can compare the effects of market volatilities on JB Hunt and John Wood 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 John Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and John Wood.
Diversification Opportunities for JB Hunt and John Wood
Poor diversification
The 3 months correlation between 0J71 and John is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and John Wood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wood Group 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 John Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wood Group has no effect on the direction of JB Hunt i.e., JB Hunt and John Wood go up and down completely randomly.
Pair Corralation between JB Hunt and John Wood
Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the John Wood. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 5.96 times less risky than John Wood. The stock trades about -0.1 of its potential returns per unit of risk. The John Wood Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,470 in John Wood Group on December 28, 2024 and sell it today you would lose (2,380) from holding John Wood Group or give up 36.79% 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. John Wood Group
Performance |
Timeline |
JB Hunt Transport |
John Wood Group |
JB Hunt and John Wood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JB Hunt and John Wood
The main advantage of trading using opposite JB Hunt and John Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, John Wood 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 John Wood will offset losses from the drop in John Wood's long position.JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Toyota Motor Corp | JB Hunt vs. State Bank of | JB Hunt vs. SoftBank Group Corp |
John Wood vs. Ashtead Technology Holdings | John Wood vs. Playtech Plc | John Wood vs. Wheaton Precious Metals | John Wood vs. Silvercorp Metals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |