Correlation Between JB Hunt and Regions Financial

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

Diversification Opportunities for JB Hunt and Regions Financial

0.81

Correlation Coefficient

JB Hunt  Regions Financial

Very poor diversification

The 3 months correlation between 0J71 and Regions is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial Corp has no effect on the direction of JB Hunt i.e., JB Hunt and Regions Financial go up and down completely randomly.

Pair Corralation between JB Hunt and Regions Financial

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Regions Financial. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.05 times less risky than Regions Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Regions Financial Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,678  in Regions Financial Corp on October 5, 2024 and sell it today you would earn a total of  658.00  from holding Regions Financial Corp or generate 39.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.25%
Values	Daily Returns

JB Hunt Transport  vs.  Regions Financial Corp

JB Hunt Transport

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JB Hunt is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Regions Financial Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Regions Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JB Hunt and Regions Financial

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

The idea behind JB Hunt Transport and Regions Financial Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.