Correlation Between JB Hunt and News Corp

Can any of the company-specific risk be diversified away by investing in both JB Hunt and News Corp 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 News Corp 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 News Corp Cl, you can compare the effects of market volatilities on JB Hunt and News Corp 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 News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JB Hunt and News Corp.

Diversification Opportunities for JB Hunt and News Corp

0.89

Correlation Coefficient

JB Hunt  News Corp

Very poor diversification

The 3 months correlation between 0J71 and News is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and News Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp Cl 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp Cl has no effect on the direction of JB Hunt i.e., JB Hunt and News Corp go up and down completely randomly.

Pair Corralation between JB Hunt and News Corp

Assuming the 90 days trading horizon JB Hunt is expected to generate 2.98 times less return on investment than News Corp. In addition to that, JB Hunt is 1.57 times more volatile than News Corp Cl. It trades about 0.06 of its total potential returns per unit of risk. News Corp Cl is currently generating about 0.28 per unit of volatility. If you would invest  2,742  in News Corp Cl on September 5, 2024 and sell it today you would earn a total of  236.00  from holding News Corp Cl or generate 8.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

JB Hunt Transport  vs.  News Corp Cl

JB Hunt Transport

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JB Hunt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

News Corp Cl

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in News Corp Cl are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, News Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JB Hunt and News Corp

The main advantage of trading using opposite JB Hunt and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JB Hunt position performs unexpectedly, News Corp 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 News Corp will offset losses from the drop in News Corp's long position.

The idea behind JB Hunt Transport and News Corp Cl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.