Correlation Between Jack Henry and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both Jack Henry and Accenture Plc 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 Jack Henry and Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack Henry Associates and Accenture plc, you can compare the effects of market volatilities on Jack Henry and Accenture Plc 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 Jack Henry with a short position of Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Henry and Accenture Plc.
Diversification Opportunities for Jack Henry and Accenture Plc
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jack and Accenture is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc and Jack Henry 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 Jack Henry Associates are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Jack Henry i.e., Jack Henry and Accenture Plc go up and down completely randomly.
Pair Corralation between Jack Henry and Accenture Plc
Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the Accenture Plc. But the stock apears to be less risky and, when comparing its historical volatility, Jack Henry Associates is 1.95 times less risky than Accenture Plc. The stock trades about -0.34 of its potential returns per unit of risk. The Accenture plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 36,132 in Accenture plc on August 27, 2024 and sell it today you would lose (3.00) from holding Accenture plc or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Henry Associates vs. Accenture plc
Performance |
| Timeline |
| Jack Henry Associates |
| Accenture plc |
Jack Henry and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Henry and Accenture Plc
The main advantage of trading using opposite Jack Henry and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Henry position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| Jack Henry vs. Cognizant Technology Solutions | Jack Henry vs. CDW Corp | Jack Henry vs. Gartner | Jack Henry vs. Broadridge Financial Solutions |
| Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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