Correlation Between JB Hunt and Apple

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

Diversification Opportunities for JB Hunt and Apple

-0.43

Correlation Coefficient

JB Hunt  Apple

Very good diversification

The 3 months correlation between 0J71 and Apple is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of JB Hunt i.e., JB Hunt and Apple go up and down completely randomly.

Pair Corralation between JB Hunt and Apple

Assuming the 90 days trading horizon JB Hunt is expected to generate 3.4 times less return on investment than Apple. But when comparing it to its historical volatility, JB Hunt Transport is 2.38 times less risky than Apple. It trades about 0.03 of its potential returns per unit of risk. Apple Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  22,920  in Apple Inc on October 12, 2024 and sell it today you would earn a total of  1,330  from holding Apple Inc or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

JB Hunt Transport  vs.  Apple Inc

JB Hunt Transport

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 2 (%) 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.

Apple Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JB Hunt and Apple

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

The idea behind JB Hunt Transport and Apple Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.