Correlation Between Capstone Technologies and Jack Henry

Can any of the company-specific risk be diversified away by investing in both Capstone Technologies 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 Capstone Technologies and Jack Henry into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capstone Technologies Group and Jack Henry Associates, you can compare the effects of market volatilities on Capstone Technologies 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 Capstone Technologies with a short position of Jack Henry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Technologies and Jack Henry.

Diversification Opportunities for Capstone Technologies and Jack Henry

0.13

Correlation Coefficient

Capstone Technologies  Jack Henry

Average diversification

The 3 months correlation between Capstone and Jack is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Technologies Group 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 Capstone Technologies 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 Capstone Technologies Group 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 Capstone Technologies i.e., Capstone Technologies and Jack Henry go up and down completely randomly.

Pair Corralation between Capstone Technologies and Jack Henry

Given the investment horizon of 90 days Capstone Technologies Group is expected to under-perform the Jack Henry. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capstone Technologies Group is 4.37 times less risky than Jack Henry. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Jack Henry Associates is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  17,451  in Jack Henry Associates on December 29, 2024 and sell it today you would earn a total of  408.00  from holding Jack Henry Associates or generate 2.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capstone Technologies Group  vs.  Jack Henry Associates

Capstone Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capstone Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Capstone Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Jack Henry Associates

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack Henry Associates are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Jack Henry is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Capstone Technologies and Jack Henry

The main advantage of trading using opposite Capstone Technologies and Jack Henry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Technologies 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.

The idea behind Capstone Technologies Group and Jack Henry Associates pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.