Correlation Between Air Products and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Air Products 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 Air Products and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products Chemicals and JB Hunt Transport, you can compare the effects of market volatilities on Air Products 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 Air Products with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and JB Hunt.
Diversification Opportunities for Air Products and JB Hunt
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and 0J71 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals 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 Air Products 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 Air Products Chemicals 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 Air Products i.e., Air Products and JB Hunt go up and down completely randomly.
Pair Corralation between Air Products and JB Hunt
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 1.0 times more return on investment than JB Hunt. However, Air Products is 1.0 times more volatile than JB Hunt Transport. It trades about 0.0 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.01 per unit of risk. If you would invest 29,380 in Air Products Chemicals on September 25, 2024 and sell it today you would lose (124.00) from holding Air Products Chemicals or give up 0.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Products Chemicals vs. JB Hunt Transport
Performance |
Timeline |
Air Products Chemicals |
JB Hunt Transport |
Air Products and JB Hunt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Products and JB Hunt
The main advantage of trading using opposite Air Products and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products 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.Air Products vs. Molson Coors Beverage | Air Products vs. Cars Inc | Air Products vs. Associated British Foods | Air Products vs. Westlake Chemical Corp |
JB Hunt vs. Check Point Software | JB Hunt vs. Albion Technology General | JB Hunt vs. Take Two Interactive Software | JB Hunt vs. Air Products Chemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |