Correlation Between JB Hunt and Eco Oil

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

Diversification Opportunities for JB Hunt and Eco Oil

-0.42

Correlation Coefficient

JB Hunt  Eco Oil

Very good diversification

The 3 months correlation between 0J71 and Eco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Oil Gas 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 Eco Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Oil Gas has no effect on the direction of JB Hunt i.e., JB Hunt and Eco Oil go up and down completely randomly.

Pair Corralation between JB Hunt and Eco Oil

Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.54 times more return on investment than Eco Oil. However, JB Hunt Transport is 1.86 times less risky than Eco Oil. It trades about -0.01 of its potential returns per unit of risk. Eco Oil Gas is currently generating about -0.02 per unit of risk. If you would invest  19,372  in JB Hunt Transport on September 27, 2024 and sell it today you would lose (2,283) from holding JB Hunt Transport or give up 11.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.66%
Values	Daily Returns

JB Hunt Transport  vs.  Eco Oil Gas

JB Hunt Transport

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eco Oil Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eco Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Eco Oil is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JB Hunt and Eco Oil

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

The idea behind JB Hunt Transport and Eco Oil Gas 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.