Correlation Between JB Hunt and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Westlake Chemical 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 Westlake Chemical 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 Westlake Chemical Corp, you can compare the effects of market volatilities on JB Hunt and Westlake Chemical 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 Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Westlake Chemical.
Diversification Opportunities for JB Hunt and Westlake Chemical
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0J71 and Westlake is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Westlake Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical Corp 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 Westlake Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westlake Chemical Corp has no effect on the direction of JB Hunt i.e., JB Hunt and Westlake Chemical go up and down completely randomly.
Pair Corralation between JB Hunt and Westlake Chemical
Assuming the 90 days trading horizon JB Hunt is expected to generate 2.75 times less return on investment than Westlake Chemical. But when comparing it to its historical volatility, JB Hunt Transport is 1.17 times less risky than Westlake Chemical. It trades about 0.01 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,253 in Westlake Chemical Corp on September 4, 2024 and sell it today you would earn a total of 639.00 from holding Westlake Chemical Corp or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.42% |
| Values | Daily Returns |
JB Hunt Transport vs. Westlake Chemical Corp
Performance |
| Timeline |
| JB Hunt Transport |
| Westlake Chemical Corp |
JB Hunt and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Westlake Chemical
The main advantage of trading using opposite JB Hunt and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Westlake Chemical 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 Westlake Chemical will offset losses from the drop in Westlake Chemical's long position.| JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Hyundai Motor | JB Hunt vs. Toyota Motor Corp |
| Westlake Chemical vs. Samsung Electronics Co | Westlake Chemical vs. Samsung Electronics Co | Westlake Chemical vs. Hyundai Motor | Westlake Chemical vs. Toyota Motor Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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