Correlation Between JB Hunt and Evolution Gaming

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

Diversification Opportunities for JB Hunt and Evolution Gaming

-0.18

Correlation Coefficient

JB Hunt  Evolution Gaming

Good diversification

The 3 months correlation between 0J71 and Evolution is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of JB Hunt i.e., JB Hunt and Evolution Gaming go up and down completely randomly.

Pair Corralation between JB Hunt and Evolution Gaming

Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.76 times more return on investment than Evolution Gaming. However, JB Hunt Transport is 1.32 times less risky than Evolution Gaming. It trades about 0.07 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.04 per unit of risk. If you would invest  16,806  in JB Hunt Transport on September 15, 2024 and sell it today you would earn a total of  1,219  from holding JB Hunt Transport or generate 7.25% return on investment over 90 days.

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

JB Hunt Transport  vs.  Evolution Gaming Group

JB Hunt Transport

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 5 (%) 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.

Evolution Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolution Gaming Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Evolution Gaming is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JB Hunt and Evolution Gaming

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

The idea behind JB Hunt Transport and Evolution Gaming Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.