Correlation Between Seagate Technology and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Seagate 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 Seagate 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 Seagate Technology Holdings and JB Hunt Transport, you can compare the effects of market volatilities on Seagate 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 Seagate Technology with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and JB Hunt.
Diversification Opportunities for Seagate Technology and JB Hunt
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seagate and J1BH34 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology Holdings 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 Seagate 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 Seagate Technology Holdings 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 Seagate Technology i.e., Seagate Technology and JB Hunt go up and down completely randomly.
Pair Corralation between Seagate Technology and JB Hunt
Assuming the 90 days trading horizon Seagate Technology Holdings is expected to generate 1.65 times more return on investment than JB Hunt. However, Seagate Technology is 1.65 times more volatile than JB Hunt Transport. It trades about 0.07 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 43,779 in Seagate Technology Holdings on October 12, 2024 and sell it today you would earn a total of 10,725 from holding Seagate Technology Holdings or generate 24.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seagate Technology Holdings vs. JB Hunt Transport
Performance |
| Timeline |
| Seagate Technology |
| JB Hunt Transport |
Seagate Technology and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seagate Technology and JB Hunt
The main advantage of trading using opposite Seagate Technology and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagate 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.| Seagate Technology vs. STAG Industrial, | Seagate Technology vs. salesforce inc | Seagate Technology vs. Nordon Indstrias Metalrgicas | Seagate Technology vs. American Airlines Group |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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