Correlation Between RLI Corp and Jack Henry
Can any of the company-specific risk be diversified away by investing in both RLI Corp 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 RLI Corp and Jack Henry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLI Corp and Jack Henry Associates, you can compare the effects of market volatilities on RLI Corp 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 RLI Corp with a short position of Jack Henry. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLI Corp and Jack Henry.
Diversification Opportunities for RLI Corp and Jack Henry
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RLI and Jack is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding RLI Corp 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 RLI Corp 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 RLI Corp 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 RLI Corp i.e., RLI Corp and Jack Henry go up and down completely randomly.
Pair Corralation between RLI Corp and Jack Henry
Considering the 90-day investment horizon RLI Corp is expected to generate 1.28 times less return on investment than Jack Henry. In addition to that, RLI Corp is 1.11 times more volatile than Jack Henry Associates. It trades about 0.03 of its total potential returns per unit of risk. Jack Henry Associates is currently generating about 0.05 per unit of volatility. If you would invest 13,759 in Jack Henry Associates on November 1, 2024 and sell it today you would earn a total of 3,675 from holding Jack Henry Associates or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLI Corp vs. Jack Henry Associates
Performance |
| Timeline |
| RLI Corp |
| Jack Henry Associates |
RLI Corp and Jack Henry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLI Corp and Jack Henry
The main advantage of trading using opposite RLI Corp and Jack Henry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLI Corp 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.| RLI Corp vs. Horace Mann Educators | RLI Corp vs. Kemper | RLI Corp vs. Global Indemnity PLC | RLI Corp vs. Argo Group International |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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