Correlation Between JB Hunt and Applied Materials,

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

Diversification Opportunities for JB Hunt and Applied Materials,

-0.53

Correlation Coefficient

JB Hunt  Applied Materials,

Excellent diversification

The 3 months correlation between J1BH34 and Applied is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, 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 Applied Materials,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials, has no effect on the direction of JB Hunt i.e., JB Hunt and Applied Materials, go up and down completely randomly.

Pair Corralation between JB Hunt and Applied Materials,

Assuming the 90 days trading horizon JB Hunt is expected to generate 3.43 times less return on investment than Applied Materials,. But when comparing it to its historical volatility, JB Hunt Transport is 2.19 times less risky than Applied Materials,. It trades about 0.04 of its potential returns per unit of risk. Applied Materials, is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  7,287  in Applied Materials, on October 8, 2024 and sell it today you would earn a total of  3,111  from holding Applied Materials, or generate 42.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JB Hunt Transport  vs.  Applied Materials,

JB Hunt Transport

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, JB Hunt is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Materials,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Materials, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Applied Materials, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JB Hunt and Applied Materials,

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

The idea behind JB Hunt Transport and Applied Materials, 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.