Correlation Between Unity Software and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Unity Software 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 Unity Software and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unity Software and JB Hunt Transport, you can compare the effects of market volatilities on Unity Software 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 Unity Software with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unity Software and JB Hunt.
Diversification Opportunities for Unity Software and JB Hunt
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unity and J1BH34 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software 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 Unity Software 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 Unity Software 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 Unity Software i.e., Unity Software and JB Hunt go up and down completely randomly.
Pair Corralation between Unity Software and JB Hunt
Assuming the 90 days trading horizon Unity Software is expected to generate 188.26 times more return on investment than JB Hunt. However, Unity Software is 188.26 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 0.13 per unit of risk. If you would invest 610.00 in Unity Software on October 12, 2024 and sell it today you would earn a total of 84.00 from holding Unity Software or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unity Software vs. JB Hunt Transport
Performance |
| Timeline |
| Unity Software |
| JB Hunt Transport |
Unity Software and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unity Software and JB Hunt
The main advantage of trading using opposite Unity Software and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity Software 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.| Unity Software vs. Unifique Telecomunicaes SA | Unity Software vs. Paycom Software | Unity Software vs. Take Two Interactive Software | Unity Software vs. American Airlines Group |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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