Correlation Between JB Hunt and Watsco

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

Diversification Opportunities for JB Hunt and Watsco

-0.46

Correlation Coefficient

JB Hunt  Watsco

Very good diversification

The 3 months correlation between JBHT and Watsco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding JB Hunt Transport and Watsco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Watsco Inc 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 Watsco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Watsco Inc has no effect on the direction of JB Hunt i.e., JB Hunt and Watsco go up and down completely randomly.

Pair Corralation between JB Hunt and Watsco

Given the investment horizon of 90 days JB Hunt Transport is expected to generate 1.66 times more return on investment than Watsco. However, JB Hunt is 1.66 times more volatile than Watsco Inc. It trades about 0.1 of its potential returns per unit of risk. Watsco Inc is currently generating about -0.1 per unit of risk. If you would invest  14,161  in JB Hunt Transport on August 3, 2025 and sell it today you would earn a total of  2,725  from holding JB Hunt Transport or generate 19.24% return on investment over 90 days.

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

JB Hunt Transport  vs.  Watsco Inc

JB Hunt Transport

Risk-Adjusted Performance

Fair

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 abnormal technical indicators, JB Hunt unveiled solid returns over the last few months and may actually be approaching a breakup point.

Watsco Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Watsco Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with JB Hunt and Watsco

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

The idea behind JB Hunt Transport and Watsco Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.