Correlation Between Brown Brown and Jack Henry
Can any of the company-specific risk be diversified away by investing in both Brown Brown and Jack Henry 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 Brown Brown and Jack Henry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brown Brown and Jack Henry Associates, you can compare the effects of market volatilities on Brown Brown and Jack Henry 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 Brown Brown with a short position of Jack Henry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brown Brown and Jack Henry.
Diversification Opportunities for Brown Brown and Jack Henry
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brown and Jack is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brown Brown and Jack Henry Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack Henry Associates and Brown Brown 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 Brown Brown are associated (or correlated) with Jack Henry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack Henry Associates has no effect on the direction of Brown Brown i.e., Brown Brown and Jack Henry go up and down completely randomly.
Pair Corralation between Brown Brown and Jack Henry
Considering the 90-day investment horizon Brown Brown is expected to generate 1.24 times more return on investment than Jack Henry. However, Brown Brown is 1.24 times more volatile than Jack Henry Associates. It trades about 0.14 of its potential returns per unit of risk. Jack Henry Associates is currently generating about -0.02 per unit of risk. If you would invest 10,202 in Brown Brown on November 1, 2024 and sell it today you would earn a total of 344.00 from holding Brown Brown or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brown Brown vs. Jack Henry Associates
Performance |
| Timeline |
| Brown Brown |
| Jack Henry Associates |
Brown Brown and Jack Henry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brown Brown and Jack Henry
The main advantage of trading using opposite Brown Brown and Jack Henry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Brown position performs unexpectedly, Jack Henry 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 Jack Henry will offset losses from the drop in Jack Henry's long position.| Brown Brown vs. Marsh McLennan Companies | Brown Brown vs. Aon PLC | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Erie Indemnity |
| Jack Henry vs. CACI International | Jack Henry vs. CDW Corp | Jack Henry vs. Broadridge Financial Solutions | Jack Henry vs. ExlService Holdings |
Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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