Correlation Between Taylor Maritime and JB Hunt

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

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

Diversification Opportunities for Taylor Maritime and JB Hunt

-0.21

Correlation Coefficient

Taylor Maritime  JB Hunt

Very good diversification

The 3 months correlation between Taylor and 0J71 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Maritime Investments 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 Taylor Maritime 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 Taylor Maritime Investments 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 Taylor Maritime i.e., Taylor Maritime and JB Hunt go up and down completely randomly.

Pair Corralation between Taylor Maritime and JB Hunt

Assuming the 90 days trading horizon Taylor Maritime Investments is expected to under-perform the JB Hunt. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Maritime Investments is 1.08 times less risky than JB Hunt. The stock trades about -0.08 of its potential returns per unit of risk. The JB Hunt Transport is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  17,217  in JB Hunt Transport on September 4, 2024 and sell it today you would earn a total of  1,693  from holding JB Hunt Transport or generate 9.83% return on investment over 90 days.

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

Taylor Maritime Investments  vs.  JB Hunt Transport

Taylor Maritime Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taylor Maritime Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

JB Hunt Transport

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 7 (%) 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 Taylor Maritime and JB Hunt

The main advantage of trading using opposite Taylor Maritime and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Maritime 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 Taylor Maritime Investments 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.