Correlation Between JB Hunt and Mineral Financial

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

Diversification Opportunities for JB Hunt and Mineral Financial

-0.7

Correlation Coefficient

JB Hunt  Mineral Financial

Excellent diversification

The 3 months correlation between 0J71 and Mineral is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Mineral Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineral Financial 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 Mineral Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineral Financial has no effect on the direction of JB Hunt i.e., JB Hunt and Mineral Financial go up and down completely randomly.

Pair Corralation between JB Hunt and Mineral Financial

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Mineral Financial. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 2.34 times less risky than Mineral Financial. The stock trades about -0.14 of its potential returns per unit of risk. The Mineral Financial Investments is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,275  in Mineral Financial Investments on December 22, 2024 and sell it today you would earn a total of  775.00  from holding Mineral Financial Investments or generate 60.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

JB Hunt Transport  vs.  Mineral Financial Investments

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.

Mineral Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mineral Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and Mineral Financial

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

The idea behind JB Hunt Transport and Mineral Financial Investments 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 .