Correlation Between JB Hunt and Radiant Logistics

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

Diversification Opportunities for JB Hunt and Radiant Logistics

0.88

Correlation Coefficient

JB Hunt  Radiant Logistics

Very poor diversification

The 3 months correlation between JBHT and Radiant is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Radiant Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Logistics 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 Radiant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Logistics has no effect on the direction of JB Hunt i.e., JB Hunt and Radiant Logistics go up and down completely randomly.

Pair Corralation between JB Hunt and Radiant Logistics

Given the investment horizon of 90 days JB Hunt is expected to generate 65.24 times less return on investment than Radiant Logistics. But when comparing it to its historical volatility, JB Hunt Transport is 1.35 times less risky than Radiant Logistics. It trades about 0.0 of its potential returns per unit of risk. Radiant Logistics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  615.00  in Radiant Logistics on September 4, 2024 and sell it today you would earn a total of  144.00  from holding Radiant Logistics or generate 23.41% 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.  Radiant Logistics

JB Hunt Transport

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, JB Hunt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Radiant Logistics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Radiant Logistics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Radiant Logistics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and Radiant Logistics

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

The idea behind JB Hunt Transport and Radiant Logistics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.