Correlation Between JB Hunt and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Fortune Brands 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 Fortune Brands 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 Fortune Brands Home, you can compare the effects of market volatilities on JB Hunt and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Fortune Brands.
Diversification Opportunities for JB Hunt and Fortune Brands
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0J71 and Fortune is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of JB Hunt i.e., JB Hunt and Fortune Brands go up and down completely randomly.
Pair Corralation between JB Hunt and Fortune Brands
Assuming the 90 days trading horizon JB Hunt Transport is expected to generate 0.87 times more return on investment than Fortune Brands. However, JB Hunt Transport is 1.15 times less risky than Fortune Brands. It trades about -0.02 of its potential returns per unit of risk. Fortune Brands Home is currently generating about -0.02 per unit of risk. If you would invest 18,846 in JB Hunt Transport on November 7, 2024 and sell it today you would lose (1,865) from holding JB Hunt Transport or give up 9.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.81% |
| Values | Daily Returns |
JB Hunt Transport vs. Fortune Brands Home
Performance |
| Timeline |
| JB Hunt Transport |
| Fortune Brands Home |
JB Hunt and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Fortune Brands
The main advantage of trading using opposite JB Hunt and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Samsung Electronics Co | JB Hunt vs. Toyota Motor Corp | JB Hunt vs. Reliance Industries Ltd |
| Fortune Brands vs. Samsung Electronics Co | Fortune Brands vs. Samsung Electronics Co | Fortune Brands vs. Toyota Motor Corp | Fortune Brands vs. Reliance Industries Ltd |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |