Correlation Between Sovereign Metals and JB Hunt

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

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

Diversification Opportunities for Sovereign Metals and JB Hunt

0.16

Correlation Coefficient

Sovereign Metals  JB Hunt

Average diversification

The 3 months correlation between Sovereign and 0J71 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sovereign Metals 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 Sovereign Metals 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 Sovereign Metals 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 Sovereign Metals i.e., Sovereign Metals and JB Hunt go up and down completely randomly.

Pair Corralation between Sovereign Metals and JB Hunt

Assuming the 90 days trading horizon Sovereign Metals is expected to generate 1.51 times less return on investment than JB Hunt. In addition to that, Sovereign Metals is 1.15 times more volatile than JB Hunt Transport. It trades about 0.07 of its total potential returns per unit of risk. JB Hunt Transport is currently generating about 0.12 per unit of volatility. If you would invest  13,193  in JB Hunt Transport on April 24, 2025 and sell it today you would earn a total of  2,033  from holding JB Hunt Transport or generate 15.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Sovereign Metals  vs.  JB Hunt Transport

Sovereign Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sovereign Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sovereign Metals may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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

Pair Trading with Sovereign Metals and JB Hunt

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

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.