Correlation Between JB Hunt and PAM Transportation
Can any of the company-specific risk be diversified away by investing in both JB Hunt and PAM Transportation 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 PAM Transportation 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 PAM Transportation Services, you can compare the effects of market volatilities on JB Hunt and PAM Transportation 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 PAM Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and PAM Transportation.
Diversification Opportunities for JB Hunt and PAM Transportation
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JBHT and PAM is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and PAM Transportation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Transportation 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 PAM Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Transportation has no effect on the direction of JB Hunt i.e., JB Hunt and PAM Transportation go up and down completely randomly.
Pair Corralation between JB Hunt and PAM Transportation
Given the investment horizon of 90 days JB Hunt Transport is expected to under-perform the PAM Transportation. In addition to that, JB Hunt is 1.41 times more volatile than PAM Transportation Services. It trades about -0.36 of its total potential returns per unit of risk. PAM Transportation Services is currently generating about -0.47 per unit of volatility. If you would invest 1,636 in PAM Transportation Services on January 20, 2024 and sell it today you would lose (238.00) from holding PAM Transportation Services or give up 14.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. PAM Transportation Services
Performance |
| Timeline |
| JB Hunt Transport |
| PAM Transportation |
JB Hunt and PAM Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and PAM Transportation
The main advantage of trading using opposite JB Hunt and PAM Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, PAM Transportation 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 PAM Transportation will offset losses from the drop in PAM Transportation's long position.| JB Hunt vs. Forward Air | JB Hunt vs. Hub Group | JB Hunt vs. CH Robinson Worldwide | JB Hunt vs. Expeditors International of |
| PAM Transportation vs. Heartland Express | PAM Transportation vs. Werner Enterprises | PAM Transportation vs. Universal Logistics Holdings | PAM Transportation vs. Schneider National |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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