Correlation Between JB Hunt and CVR Energy

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

Diversification Opportunities for JB Hunt and CVR Energy

0.0

Correlation Coefficient

JB Hunt  CVR Energy

Pay attention - limited upside

The 3 months correlation between 0J71 and CVR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy 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 CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of JB Hunt i.e., JB Hunt and CVR Energy go up and down completely randomly.

Pair Corralation between JB Hunt and CVR Energy

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the CVR Energy. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.81 times less risky than CVR Energy. The stock trades about -0.14 of its potential returns per unit of risk. The CVR Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,779  in CVR Energy on December 22, 2024 and sell it today you would earn a total of  387.00  from holding CVR Energy or generate 21.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

JB Hunt Transport  vs.  CVR Energy

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CVR Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CVR Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and CVR Energy

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

The idea behind JB Hunt Transport and CVR Energy 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.