Correlation Between FedEx and JB Hunt
Can any of the company-specific risk be diversified away by investing in both FedEx 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 FedEx and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedEx and JB Hunt Transport, you can compare the effects of market volatilities on FedEx 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 FedEx with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedEx and JB Hunt.
Diversification Opportunities for FedEx and JB Hunt
Weak diversification
The 3 months correlation between FedEx and JBHT is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding FedEx 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 FedEx 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 FedEx 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 FedEx i.e., FedEx and JB Hunt go up and down completely randomly.
Pair Corralation between FedEx and JB Hunt
Considering the 90-day investment horizon FedEx is expected to generate 0.6 times more return on investment than JB Hunt. However, FedEx is 1.67 times less risky than JB Hunt. It trades about 0.44 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.15 per unit of risk. If you would invest 27,545 in FedEx on August 28, 2024 and sell it today you would earn a total of 2,970 from holding FedEx or generate 10.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FedEx vs. JB Hunt Transport
Performance |
Timeline |
FedEx |
JB Hunt Transport |
FedEx and JB Hunt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FedEx and JB Hunt
The main advantage of trading using opposite FedEx and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedEx 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.FedEx vs. GXO Logistics | FedEx vs. JB Hunt Transport | FedEx vs. Expeditors International of | FedEx vs. CH Robinson Worldwide |
JB Hunt vs. Forward Air | JB Hunt vs. Hub Group | JB Hunt vs. CH Robinson Worldwide | JB Hunt vs. Expeditors International of |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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