Correlation Between Jack Henry and Fidelity National

Can any of the company-specific risk be diversified away by investing in both Jack Henry and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Jack Henry and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Henry and Fidelity National.

Diversification Opportunities for Jack Henry and Fidelity National

0.56

Correlation Coefficient

Jack Henry  Fidelity National

Very weak diversification

The 3 months correlation between Jack and Fidelity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Jack Henry i.e., Jack Henry and Fidelity National go up and down completely randomly.

Pair Corralation between Jack Henry and Fidelity National

Given the investment horizon of 90 days Jack Henry Associates is expected to generate 0.49 times more return on investment than Fidelity National. However, Jack Henry Associates is 2.02 times less risky than Fidelity National. It trades about -0.03 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.18 per unit of risk. If you would invest  17,563  in Jack Henry Associates on November 28, 2024 and sell it today you would lose (302.00) from holding Jack Henry Associates or give up 1.72% of portfolio value over 90 days.

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

Jack Henry Associates  vs.  Fidelity National Information

Jack Henry Associates

Risk-Adjusted Performance

Weak

Over the last 90 days Jack Henry Associates has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Jack Henry and Fidelity National

The main advantage of trading using opposite Jack Henry and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Henry position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.

The idea behind Jack Henry Associates and Fidelity National Information 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.