Correlation Between JB Hunt and DSV Panalpina

Can any of the company-specific risk be diversified away by investing in both JB Hunt and DSV Panalpina 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 DSV Panalpina 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 DSV Panalpina AS, you can compare the effects of market volatilities on JB Hunt and DSV Panalpina 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 DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and DSV Panalpina.

Diversification Opportunities for JB Hunt and DSV Panalpina

-0.04

Correlation Coefficient

JB Hunt  DSV Panalpina

Good diversification

The 3 months correlation between JBHT and DSV is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of JB Hunt i.e., JB Hunt and DSV Panalpina go up and down completely randomly.

Pair Corralation between JB Hunt and DSV Panalpina

Given the investment horizon of 90 days JB Hunt Transport is expected to under-perform the DSV Panalpina. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.41 times less risky than DSV Panalpina. The stock trades about -0.1 of its potential returns per unit of risk. The DSV Panalpina AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  21,197  in DSV Panalpina AS on December 27, 2024 and sell it today you would lose (1,715) from holding DSV Panalpina AS or give up 8.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

JB Hunt Transport  vs.  DSV Panalpina AS

JB Hunt Transport

Risk-Adjusted Performance

Very Weak

Over the last 90 days JB Hunt Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with JB Hunt and DSV Panalpina

The main advantage of trading using opposite JB Hunt and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, DSV Panalpina 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 DSV Panalpina will offset losses from the drop in DSV Panalpina's long position.

The idea behind JB Hunt Transport and DSV Panalpina AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .