Correlation Between JB Hunt and STMicroelectronics

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

Diversification Opportunities for JB Hunt and STMicroelectronics

-0.74

Correlation Coefficient

JB Hunt  STMicroelectronics

Pay attention - limited upside

The 3 months correlation between J1BH34 and STMicroelectronics is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of JB Hunt i.e., JB Hunt and STMicroelectronics go up and down completely randomly.

Pair Corralation between JB Hunt and STMicroelectronics

Assuming the 90 days trading horizon JB Hunt Transport is expected to under-perform the STMicroelectronics. But the stock apears to be less risky and, when comparing its historical volatility, JB Hunt Transport is 1.09 times less risky than STMicroelectronics. The stock trades about -0.14 of its potential returns per unit of risk. The STMicroelectronics NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  13,057  in STMicroelectronics NV on April 24, 2025 and sell it today you would earn a total of  4,475  from holding STMicroelectronics NV or generate 34.27% return on investment over 90 days.

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

JB Hunt Transport  vs.  STMicroelectronics NV

JB Hunt Transport

Risk-Adjusted Performance

Very Weak

Over the last 90 days JB Hunt Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

STMicroelectronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, STMicroelectronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JB Hunt and STMicroelectronics

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

The idea behind JB Hunt Transport and STMicroelectronics NV 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.