Correlation Between Radiant Logistics and JB Hunt

Can any of the company-specific risk be diversified away by investing in both Radiant Logistics 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 Radiant Logistics and JB Hunt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Radiant Logistics and JB Hunt Transport, you can compare the effects of market volatilities on Radiant Logistics 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 Radiant Logistics with a short position of JB Hunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Logistics and JB Hunt.

Diversification Opportunities for Radiant Logistics and JB Hunt

0.88

Correlation Coefficient

Radiant Logistics  JB Hunt

Very poor diversification

The 3 months correlation between Radiant and JBHT is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Logistics 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 Radiant Logistics 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 Radiant Logistics 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 Radiant Logistics i.e., Radiant Logistics and JB Hunt go up and down completely randomly.

Pair Corralation between Radiant Logistics and JB Hunt

Given the investment horizon of 90 days Radiant Logistics is expected to generate 1.35 times more return on investment than JB Hunt. However, Radiant Logistics is 1.35 times more volatile than JB Hunt Transport. It trades about 0.05 of its potential returns per unit of risk. JB Hunt Transport is currently generating about 0.0 per unit of risk. 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

Radiant Logistics  vs.  JB Hunt Transport

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.

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.

Pair Trading with Radiant Logistics and JB Hunt

The main advantage of trading using opposite Radiant Logistics and JB Hunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Logistics 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.

The idea behind Radiant Logistics and JB Hunt Transport 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .