Correlation Between JB Hunt and Sherborne Investors

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

Diversification Opportunities for JB Hunt and Sherborne Investors

0.47

Correlation Coefficient

JB Hunt  Sherborne Investors

Very weak diversification

The 3 months correlation between 0J71 and Sherborne is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Sherborne Investors Guernsey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherborne Investors 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 Sherborne Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherborne Investors has no effect on the direction of JB Hunt i.e., JB Hunt and Sherborne Investors go up and down completely randomly.

Pair Corralation between JB Hunt and Sherborne Investors

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the Sherborne Investors. In addition to that, JB Hunt is 2.08 times more volatile than Sherborne Investors Guernsey. It trades about -0.14 of its total potential returns per unit of risk. Sherborne Investors Guernsey is currently generating about -0.23 per unit of volatility. If you would invest  5,125  in Sherborne Investors Guernsey on December 23, 2024 and sell it today you would lose (545.00) from holding Sherborne Investors Guernsey or give up 10.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

JB Hunt Transport  vs.  Sherborne Investors Guernsey

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 unsteady 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.

Sherborne Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sherborne Investors Guernsey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with JB Hunt and Sherborne Investors

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

The idea behind JB Hunt Transport and Sherborne Investors Guernsey 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.