Correlation Between United Natural and JB Hunt
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods, and JB Hunt Transport, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and JB Hunt.
Diversification Opportunities for United Natural and JB Hunt
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and J1BH34 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods, 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 United Natural 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 United Natural Foods, 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 United Natural i.e., United Natural and JB Hunt go up and down completely randomly.
Pair Corralation between United Natural and JB Hunt
Assuming the 90 days trading horizon United Natural is expected to generate 2.13 times less return on investment than JB Hunt. In addition to that, United Natural is 3.42 times more volatile than JB Hunt Transport. It trades about 0.03 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.21 per unit of volatility. If you would invest 2,792 in JB Hunt Transport on November 7, 2024 and sell it today you would earn a total of 93.00 from holding JB Hunt Transport or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods, vs. JB Hunt Transport
Performance |
| Timeline |
| United Natural Foods, |
| JB Hunt Transport |
United Natural and JB Hunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and JB Hunt
The main advantage of trading using opposite United Natural and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. CVS Health | United Natural vs. Lloyds Banking Group | United Natural vs. HCA Healthcare, | United Natural vs. LPL Financial Holdings |
| JB Hunt vs. T Mobile | JB Hunt vs. BIONTECH SE DRN | JB Hunt vs. Nordon Indstrias Metalrgicas | JB Hunt vs. Guidewire Software, |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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