Correlation Between JB Hunt and SSC Technologies

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

Diversification Opportunities for JB Hunt and SSC Technologies

0.85

Correlation Coefficient

JB Hunt  SSC Technologies

Very poor diversification

The 3 months correlation between J1BH34 and SSC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and SSC Technologies Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Hol 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Hol has no effect on the direction of JB Hunt i.e., JB Hunt and SSC Technologies go up and down completely randomly.

Pair Corralation between JB Hunt and SSC Technologies

Assuming the 90 days trading horizon JB Hunt is expected to generate 6.14 times less return on investment than SSC Technologies. But when comparing it to its historical volatility, JB Hunt Transport is 4.99 times less risky than SSC Technologies. It trades about 0.14 of its potential returns per unit of risk. SSC Technologies Holdings, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  6,678  in SSC Technologies Holdings, on December 23, 2024 and sell it today you would earn a total of  1,502  from holding SSC Technologies Holdings, or generate 22.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

JB Hunt Transport  vs.  SSC Technologies Holdings,

JB Hunt Transport

Risk-Adjusted Performance

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.

SSC Technologies Hol

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SSC Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and SSC Technologies

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

The idea behind JB Hunt Transport and SSC Technologies Holdings, 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 Global Correlations module to find global opportunities by holding instruments from different markets.