Correlation Between ONEOK and JB Hunt
Can any of the company-specific risk be diversified away by investing in both ONEOK 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 ONEOK and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and JB Hunt Transport, you can compare the effects of market volatilities on ONEOK 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 ONEOK with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and JB Hunt.
Diversification Opportunities for ONEOK and JB Hunt
Very weak diversification
The 3 months correlation between ONEOK and 0J71 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc 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 ONEOK 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 ONEOK Inc 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 ONEOK i.e., ONEOK and JB Hunt go up and down completely randomly.
Pair Corralation between ONEOK and JB Hunt
Assuming the 90 days trading horizon ONEOK Inc is expected to generate 0.82 times more return on investment than JB Hunt. However, ONEOK Inc is 1.22 times less risky than JB Hunt. It trades about 0.09 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.06 per unit of risk. If you would invest 10,200 in ONEOK Inc on October 25, 2024 and sell it today you would earn a total of 262.00 from holding ONEOK Inc or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ONEOK Inc vs. JB Hunt Transport
Performance |
| Timeline |
| ONEOK Inc |
| JB Hunt Transport |
ONEOK and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and JB Hunt
The main advantage of trading using opposite ONEOK and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK 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.| ONEOK vs. Universal Music Group | ONEOK vs. Cornish Metals | ONEOK vs. Travel Leisure Co | ONEOK vs. Arrow Electronics |
| JB Hunt vs. Toyota Motor Corp | JB Hunt vs. SoftBank Group Corp | JB Hunt vs. OTP Bank Nyrt | JB Hunt vs. ONEOK Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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