Correlation Between JB Hunt and Proficient Auto

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

Diversification Opportunities for JB Hunt and Proficient Auto

0.27

Correlation Coefficient

JB Hunt  Proficient Auto

Modest diversification

The 3 months correlation between JBHT and Proficient is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of JB Hunt i.e., JB Hunt and Proficient Auto go up and down completely randomly.

Pair Corralation between JB Hunt and Proficient Auto

Given the investment horizon of 90 days JB Hunt Transport is expected to under-perform the Proficient Auto. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 3.24 times less risky than Proficient Auto. The stock trades about -0.05 of its potential returns per unit of risk. The Proficient Auto Logistics, is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  960.00  in Proficient Auto Logistics, on November 19, 2024 and sell it today you would earn a total of  120.00  from holding Proficient Auto Logistics, or generate 12.5% return on investment over 90 days.

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

JB Hunt Transport  vs.  Proficient Auto Logistics,

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 comparatively stable technical indicators, JB Hunt is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Proficient Auto Logi

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Proficient Auto Logistics, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Proficient Auto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and Proficient Auto

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

The idea behind JB Hunt Transport and Proficient Auto Logistics, 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.