Correlation Between Marfrig Global and JB Hunt

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

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

Diversification Opportunities for Marfrig Global and JB Hunt

-0.58

Correlation Coefficient

Marfrig Global  JB Hunt

Excellent diversification

The 3 months correlation between Marfrig and J1BH34 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Marfrig Global Foods 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 Marfrig Global 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 Marfrig Global Foods 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 Marfrig Global i.e., Marfrig Global and JB Hunt go up and down completely randomly.

Pair Corralation between Marfrig Global and JB Hunt

Assuming the 90 days trading horizon Marfrig Global Foods is expected to generate 7.74 times more return on investment than JB Hunt. However, Marfrig Global is 7.74 times more volatile than JB Hunt Transport. It trades about 0.05 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.14 per unit of risk. If you would invest  1,683  in Marfrig Global Foods on December 25, 2024 and sell it today you would earn a total of  102.00  from holding Marfrig Global Foods or generate 6.06% return on investment over 90 days.

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

Marfrig Global Foods  vs.  JB Hunt Transport

Marfrig Global Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marfrig Global Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marfrig Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JB Hunt Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, JB Hunt is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marfrig Global and JB Hunt

The main advantage of trading using opposite Marfrig Global and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marfrig Global 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 Marfrig Global Foods 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.