Correlation Between DFS Furniture and JB Hunt
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and JB Hunt Transport, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and JB Hunt.
Diversification Opportunities for DFS Furniture and JB Hunt
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFS and 0J71 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and JB Hunt go up and down completely randomly.
Pair Corralation between DFS Furniture and JB Hunt
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 1.23 times more return on investment than JB Hunt. However, DFS Furniture is 1.23 times more volatile than JB Hunt Transport. It trades about 0.0 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.0 per unit of risk. If you would invest 14,255 in DFS Furniture PLC on October 16, 2024 and sell it today you would lose (1,155) from holding DFS Furniture PLC or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.58% |
| Values | Daily Returns |
DFS Furniture PLC vs. JB Hunt Transport
Performance |
| Timeline |
| DFS Furniture PLC |
| JB Hunt Transport |
DFS Furniture and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and JB Hunt
The main advantage of trading using opposite DFS Furniture and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Bell Food Group | DFS Furniture vs. Hilton Food Group | DFS Furniture vs. Wheaton Precious Metals | DFS Furniture vs. Europa Metals |
| JB Hunt vs. DFS Furniture PLC | JB Hunt vs. Schroders Investment Trusts | JB Hunt vs. Beazer Homes USA | JB Hunt vs. Tavistock Investments 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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