Correlation Between Spotify Technology and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Spotify 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 Spotify 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 Spotify Technology SA and JB Hunt Transport, you can compare the effects of market volatilities on Spotify 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 Spotify Technology with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and JB Hunt.
Diversification Opportunities for Spotify Technology and JB Hunt
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spotify and J1BH34 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA 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 Spotify 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 Spotify Technology SA 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 Spotify Technology i.e., Spotify Technology and JB Hunt go up and down completely randomly.
Pair Corralation between Spotify Technology and JB Hunt
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 2.09 times more return on investment than JB Hunt. However, Spotify Technology is 2.09 times more volatile than JB Hunt Transport. It trades about 0.14 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.01 per unit of risk. If you would invest 37,770 in Spotify Technology SA on October 12, 2024 and sell it today you would earn a total of 35,483 from holding Spotify Technology SA or generate 93.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Spotify Technology SA vs. JB Hunt Transport
Performance |
| Timeline |
| Spotify Technology |
| JB Hunt Transport |
Spotify Technology and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and JB Hunt
The main advantage of trading using opposite Spotify Technology and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify 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.| Spotify Technology vs. Darden Restaurants, | Spotify Technology vs. Vulcan Materials | Spotify Technology vs. JB Hunt Transport | Spotify Technology vs. GP Investments |
| JB Hunt vs. CVS Health | JB Hunt vs. Universal Health Services, | JB Hunt vs. Omega Healthcare Investors, | JB Hunt vs. Martin Marietta Materials, |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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