Correlation Between DXC Technology and JB Hunt
Can any of the company-specific risk be diversified away by investing in both DXC Technology 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 DXC Technology and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and JB Hunt Transport, you can compare the effects of market volatilities on DXC Technology 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 DXC Technology with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and JB Hunt.
Diversification Opportunities for DXC Technology and JB Hunt
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DXC and 0J71 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co 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 DXC Technology 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 DXC Technology Co 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 DXC Technology i.e., DXC Technology and JB Hunt go up and down completely randomly.
Pair Corralation between DXC Technology and JB Hunt
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 1.57 times more return on investment than JB Hunt. However, DXC Technology is 1.57 times more volatile than JB Hunt Transport. It trades about 0.18 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.1 per unit of risk. If you would invest 1,997 in DXC Technology Co on September 2, 2024 and sell it today you would earn a total of 244.00 from holding DXC Technology Co or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. JB Hunt Transport
Performance |
| Timeline |
| DXC Technology |
| JB Hunt Transport |
DXC Technology and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and JB Hunt
The main advantage of trading using opposite DXC Technology and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology 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.| DXC Technology vs. Uniper SE | DXC Technology vs. Mulberry Group PLC | DXC Technology vs. London Security Plc | DXC Technology vs. Triad Group PLC |
| JB Hunt vs. Uniper SE | JB Hunt vs. Mulberry Group PLC | JB Hunt vs. London Security Plc | JB Hunt vs. Triad Group PLC |
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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