Correlation Between JB Hunt and Werner Enterprises

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

Diversification Opportunities for JB Hunt and Werner Enterprises

0.5

Correlation Coefficient

JB Hunt  Werner Enterprises

Very weak diversification

The 3 months correlation between JBHT and Werner is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Werner Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werner Enterprises 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 Werner Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werner Enterprises has no effect on the direction of JB Hunt i.e., JB Hunt and Werner Enterprises go up and down completely randomly.

Pair Corralation between JB Hunt and Werner Enterprises

Given the investment horizon of 90 days JB Hunt Transport is expected to generate 0.83 times more return on investment than Werner Enterprises. However, JB Hunt Transport is 1.2 times less risky than Werner Enterprises. It trades about 0.13 of its potential returns per unit of risk. Werner Enterprises is currently generating about 0.04 per unit of risk. If you would invest  12,931  in JB Hunt Transport on April 25, 2025 and sell it today you would earn a total of  2,053  from holding JB Hunt Transport or generate 15.88% return on investment over 90 days.

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

JB Hunt Transport  vs.  Werner Enterprises

JB Hunt Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JB Hunt Transport are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, JB Hunt unveiled solid returns over the last few months and may actually be approaching a breakup point.

Werner Enterprises

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Werner Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Werner Enterprises is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JB Hunt and Werner Enterprises

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

The idea behind JB Hunt Transport and Werner Enterprises 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.