Correlation Between JB Hunt and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both JB Hunt and STMicroelectronics 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 STMicroelectronics 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 STMicroelectronics NV, you can compare the effects of market volatilities on JB Hunt and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and STMicroelectronics.
Diversification Opportunities for JB Hunt and STMicroelectronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0J71 and STMicroelectronics is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of JB Hunt i.e., JB Hunt and STMicroelectronics go up and down completely randomly.
Pair Corralation between JB Hunt and STMicroelectronics
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.77 times more return on investment than STMicroelectronics. However, JB Hunt Transport is 1.29 times less risky than STMicroelectronics. It trades about -0.05 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.28 per unit of risk. If you would invest 17,782 in JB Hunt Transport on November 6, 2024 and sell it today you would lose (356.00) from holding JB Hunt Transport or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. STMicroelectronics NV
Performance |
| Timeline |
| JB Hunt Transport |
| STMicroelectronics |
JB Hunt and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and STMicroelectronics
The main advantage of trading using opposite JB Hunt and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Toyota Motor Corp | JB Hunt vs. Reliance Industries Ltd |
| STMicroelectronics vs. Alliance Data Systems | STMicroelectronics vs. Extra Space Storage | STMicroelectronics vs. GlobalData PLC | STMicroelectronics vs. Odfjell Drilling |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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