Minecraft – Transporting Squid

You probably would not need to take them home. You can dye your normal sheep by making dye and right-clicking the sheep while you are holding the dye in your hand. Alternatively, you have a few options:

Using a nether portal
When you hold wheat in your hands, cows, sheep, mooshrooms, and other animals (excluding pigs) will follow you. As of version 1.4, animals, mobs, etc. are able to go through a nether portal. Now, combining these two things together, you could hold wheat (or carrots for pigs) to make animals follow you through a nether portal. Now for the tricky math. Following the article here, one block traveled in the nether is equivalent to eight blocks traveled in the overworld. However, if you are too close to the original overworld portal, you will end up where you started instead of where you are supposed to be. You must travel at least 128 blocks away from where you started (in the nether, 1024 blocks in the overworld) in order to not have your nether portal link to your existing overworld portal.

Using a Minecart
You could build a minecart track from your main base to this island to allow for efficient travel. However, you would need to make a bridge for this, even though you can travel faster by Minecart. It would also be easier to transport the animals because you can shove them into the Minecart and push it.

Land Bridge
The least efficient way to transport them (in my opinion) would be to make a land bridge and hold some wheat in your hands. After that, they will follow you as you walk. However, if you switch to another item, they will stop following you. Therefore, make sure you eat some high calorie snacks before starting your journey :).

END NOTES: The best way to go would be to use wheat to guide your sheep or other animal into the Nether Portal. From there, make Minecart tracks to wherever your base is. Note that maps do not work in the Nether. If you are not in a position to do this, you could use a land bridge, but just know that it will be far less efficient.

/summon Squid ~ ~ ~ {Riding:{id:"Bat"},Invulnerable:1}

This summons an invincible squid riding a bat. The invincibility means the squid can't airdrown but the bat can still be killed.

If you want it to never despawn:

/summon Squid ~ ~ ~ {Riding:{id:"Bat"},Invulnerable:1,PersistenceRequired:1}

To name it Derp, you'd need:

/summon Squid ~ ~ ~ {Riding:{id:"Bat"},Invulnerable:1,CustomName:"Derp",PersistenceRequired:1,CustomNameVisible:1}

This is too long for the chat box however and it might be simpler just to spawn a Nametag and use that.

UPDATE: I took some info from the other answers and made this:

/summon Squid ~ ~ ~ {Riding:{id:"Bat",Invulnerable:1,PersistenceRequired:1,ActiveEffects:[{Id:14,Amplifier:-10,Duration:2147483648}]},Invulnerable:1,CustomName:"Derp",PersistenceRequired:1,CustomNameVisible:1}

Persistent invincible squid named Derp riding a persistent invisible invincible bat.

Fly my pretties, fly!