Correlation Between Expeditors International and JB Hunt

Can any of the company-specific risk be diversified away by investing in both Expeditors International and JB Hunt 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 Expeditors International and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Expeditors International of and JB Hunt Transport, you can compare the effects of market volatilities on Expeditors International and JB Hunt 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 Expeditors International with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expeditors International and JB Hunt.

Diversification Opportunities for Expeditors International and JB Hunt

-0.69

Correlation Coefficient

Expeditors International  JB Hunt

Excellent diversification

The 3 months correlation between Expeditors and JBHT is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and JB Hunt Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hunt Transport and Expeditors International 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 Expeditors International of are associated (or correlated) with JB Hunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hunt Transport has no effect on the direction of Expeditors International i.e., Expeditors International and JB Hunt go up and down completely randomly.

Pair Corralation between Expeditors International and JB Hunt

Given the investment horizon of 90 days Expeditors International of is expected to generate 0.81 times more return on investment than JB Hunt. However, Expeditors International of is 1.24 times less risky than JB Hunt. It trades about 0.1 of its potential returns per unit of risk. JB Hunt Transport is currently generating about -0.12 per unit of risk. If you would invest  11,080  in Expeditors International of on December 29, 2024 and sell it today you would earn a total of  948.00  from holding Expeditors International of or generate 8.56% return on investment over 90 days.

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

Expeditors International of  vs.  JB Hunt Transport

Expeditors International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Expeditors International of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Expeditors International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 technical 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.

Pair Trading with Expeditors International and JB Hunt

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

The idea behind Expeditors International of and JB Hunt Transport 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.