Correlation Between Jack Henry and Commerce Bancshares
Can any of the company-specific risk be diversified away by investing in both Jack Henry and Commerce Bancshares 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 Commerce Bancshares 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 Commerce Bancshares, you can compare the effects of market volatilities on Jack Henry and Commerce Bancshares 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 Commerce Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Henry and Commerce Bancshares.
Diversification Opportunities for Jack Henry and Commerce Bancshares
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jack and Commerce is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Commerce Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Bancshares 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 Commerce Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Bancshares has no effect on the direction of Jack Henry i.e., Jack Henry and Commerce Bancshares go up and down completely randomly.
Pair Corralation between Jack Henry and Commerce Bancshares
Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the Commerce Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, Jack Henry Associates is 2.99 times less risky than Commerce Bancshares. The stock trades about -0.25 of its potential returns per unit of risk. The Commerce Bancshares is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,358 in Commerce Bancshares on August 31, 2024 and sell it today you would earn a total of 1,030 from holding Commerce Bancshares or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Henry Associates vs. Commerce Bancshares
Performance |
| Timeline |
| Jack Henry Associates |
| Commerce Bancshares |
Jack Henry and Commerce Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Henry and Commerce Bancshares
The main advantage of trading using opposite Jack Henry and Commerce Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Henry position performs unexpectedly, Commerce Bancshares 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 Commerce Bancshares will offset losses from the drop in Commerce Bancshares' long position.| Jack Henry vs. CACI International | Jack Henry vs. CDW Corp | Jack Henry vs. Broadridge Financial Solutions | Jack Henry vs. ExlService Holdings |
| Commerce Bancshares vs. BOK Financial | Commerce Bancshares vs. Texas Capital Bancshares | Commerce Bancshares vs. United Bankshares | Commerce Bancshares vs. Prosperity Bancshares |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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