Correlation Between Jack Henry and Infosys
Can any of the company-specific risk be diversified away by investing in both Jack Henry and Infosys 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 Infosys 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 Infosys Ltd ADR, you can compare the effects of market volatilities on Jack Henry and Infosys 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 Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Henry and Infosys.
Diversification Opportunities for Jack Henry and Infosys
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jack and Infosys is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Infosys Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Ltd ADR 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 Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Ltd ADR has no effect on the direction of Jack Henry i.e., Jack Henry and Infosys go up and down completely randomly.
Pair Corralation between Jack Henry and Infosys
Given the investment horizon of 90 days Jack Henry is expected to generate 2.32 times less return on investment than Infosys. But when comparing it to its historical volatility, Jack Henry Associates is 1.28 times less risky than Infosys. It trades about 0.05 of its potential returns per unit of risk. Infosys Ltd ADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,708 in Infosys Ltd ADR on August 24, 2024 and sell it today you would earn a total of 558.50 from holding Infosys Ltd ADR or generate 32.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Henry Associates vs. Infosys Ltd ADR
Performance |
| Timeline |
| Jack Henry Associates |
| Infosys Ltd ADR |
Jack Henry and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Henry and Infosys
The main advantage of trading using opposite Jack Henry and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Henry position performs unexpectedly, Infosys 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 Infosys will offset losses from the drop in Infosys' long position.| Jack Henry vs. CACI International | Jack Henry vs. CDW Corp | Jack Henry vs. Broadridge Financial Solutions | Jack Henry vs. ExlService Holdings |
| Infosys vs. Concentrix | Infosys vs. Accenture plc | Infosys vs. International Business Machines | Infosys vs. Cognizant Technology Solutions |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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