Correlation Between Jack Henry and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Jack Henry and Affiliated Managers 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 Affiliated Managers 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 Affiliated Managers Group, you can compare the effects of market volatilities on Jack Henry and Affiliated Managers 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 Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Henry and Affiliated Managers.
Diversification Opportunities for Jack Henry and Affiliated Managers
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jack and Affiliated is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Jack Henry i.e., Jack Henry and Affiliated Managers go up and down completely randomly.
Pair Corralation between Jack Henry and Affiliated Managers
Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the Affiliated Managers. In addition to that, Jack Henry is 1.6 times more volatile than Affiliated Managers Group. It trades about 0.0 of its total potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.05 per unit of volatility. If you would invest 2,329 in Affiliated Managers Group on August 31, 2024 and sell it today you would earn a total of 38.00 from holding Affiliated Managers Group or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Henry Associates vs. Affiliated Managers Group
Performance |
| Timeline |
| Jack Henry Associates |
| Affiliated Managers |
Jack Henry and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Henry and Affiliated Managers
The main advantage of trading using opposite Jack Henry and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Henry position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| Jack Henry vs. CACI International | Jack Henry vs. CDW Corp | Jack Henry vs. Broadridge Financial Solutions | Jack Henry vs. ExlService Holdings |
| Affiliated Managers vs. DBA Sempra 5750 | Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. American Financial Group | Affiliated Managers vs. National Rural Utilities |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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