Correlation Between Forward Air and JB Hunt
Can any of the company-specific risk be diversified away by investing in both Forward Air 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 Forward Air and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forward Air and JB Hunt Transport, you can compare the effects of market volatilities on Forward Air 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 Forward Air with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Air and JB Hunt.
Diversification Opportunities for Forward Air and JB Hunt
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forward and JBHT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Forward Air 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 Forward Air 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 Forward Air 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 Forward Air i.e., Forward Air and JB Hunt go up and down completely randomly.
Pair Corralation between Forward Air and JB Hunt
Given the investment horizon of 90 days Forward Air is expected to generate 2.6 times more return on investment than JB Hunt. However, Forward Air is 2.6 times more volatile than JB Hunt Transport. It trades about 0.18 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.07 per unit of risk. If you would invest 1,500 in Forward Air on August 24, 2024 and sell it today you would earn a total of 2,068 from holding Forward Air or generate 137.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forward Air vs. JB Hunt Transport
Performance |
| Timeline |
| Forward Air |
| JB Hunt Transport |
Forward Air and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forward Air and JB Hunt
The main advantage of trading using opposite Forward Air and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forward Air 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.| Forward Air vs. Landstar System | Forward Air vs. JB Hunt Transport | Forward Air vs. Expeditors International of | Forward Air 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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