Correlation Between JB Hunt and Berkshire Hathaway

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

Diversification Opportunities for JB Hunt and Berkshire Hathaway

0.45

Correlation Coefficient

JB Hunt  Berkshire Hathaway

Very weak diversification

The 3 months correlation between 0J71 and Berkshire is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway 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 Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of JB Hunt i.e., JB Hunt and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between JB Hunt and Berkshire Hathaway

Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 1.72 times more return on investment than Berkshire Hathaway. However, JB Hunt is 1.72 times more volatile than Berkshire Hathaway. It trades about 0.11 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.02 per unit of risk. If you would invest  16,648  in JB Hunt Transport on September 5, 2024 and sell it today you would earn a total of  1,962  from holding JB Hunt Transport or generate 11.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

JB Hunt Transport  vs.  Berkshire Hathaway

JB Hunt Transport

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JB Hunt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Berkshire Hathaway

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Berkshire Hathaway 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 Berkshire Hathaway

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

The idea behind JB Hunt Transport and Berkshire Hathaway 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.