Correlation Between Samsung Electronics and JB Hunt

Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and JB Hunt 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 Samsung Electronics and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Electronics Co and JB Hunt Transport, you can compare the effects of market volatilities on Samsung Electronics and JB Hunt 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 Samsung Electronics with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and JB Hunt.

Diversification Opportunities for Samsung Electronics and JB Hunt

-0.77

Correlation Coefficient

Samsung Electronics  JB Hunt

Pay attention - limited upside

The 3 months correlation between Samsung and 0J71 is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and JB Hunt go up and down completely randomly.

Pair Corralation between Samsung Electronics and JB Hunt

Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the JB Hunt. In addition to that, Samsung Electronics is 1.4 times more volatile than JB Hunt Transport. It trades about -0.22 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.08 per unit of volatility. If you would invest  17,217  in JB Hunt Transport on September 4, 2024 and sell it today you would earn a total of  1,393  from holding JB Hunt Transport or generate 8.09% return on investment over 90 days.

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

Samsung Electronics Co  vs.  JB Hunt Transport

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

JB Hunt Transport

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JB Hunt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Samsung Electronics and JB Hunt

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

The idea behind Samsung Electronics Co and JB Hunt Transport 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.