Correlation Between JB Hunt and Landstar System
Can any of the company-specific risk be diversified away by investing in both JB Hunt and Landstar System 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 Landstar System 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 Landstar System, you can compare the effects of market volatilities on JB Hunt and Landstar System 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 Landstar System. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and Landstar System.
Diversification Opportunities for JB Hunt and Landstar System
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JBHT and Landstar is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System 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 Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of JB Hunt i.e., JB Hunt and Landstar System go up and down completely randomly.
Pair Corralation between JB Hunt and Landstar System
Given the investment horizon of 90 days JB Hunt Transport is expected to generate 1.18 times more return on investment than Landstar System. However, JB Hunt is 1.18 times more volatile than Landstar System. It trades about 0.07 of its potential returns per unit of risk. Landstar System is currently generating about 0.01 per unit of risk. If you would invest 15,763 in JB Hunt Transport on August 24, 2024 and sell it today you would earn a total of 2,394 from holding JB Hunt Transport or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JB Hunt Transport vs. Landstar System
Performance |
| Timeline |
| JB Hunt Transport |
| Landstar System |
JB Hunt and Landstar System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JB Hunt and Landstar System
The main advantage of trading using opposite JB Hunt and Landstar System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, Landstar System 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 Landstar System will offset losses from the drop in Landstar System's long position.| JB Hunt vs. Forward Air | JB Hunt vs. Hub Group | JB Hunt vs. CH Robinson Worldwide | JB Hunt vs. Expeditors International of |
| Landstar System vs. Hub Group | Landstar System vs. JB Hunt Transport | Landstar System vs. Expeditors International of | Landstar System vs. CH Robinson Worldwide |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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