Correlation Between Jack Henry and Globant SA

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

Diversification Opportunities for Jack Henry and Globant SA

-0.23

Correlation Coefficient

Jack Henry  Globant SA

Very good diversification

The 3 months correlation between Jack and Globant is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA 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 Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of Jack Henry i.e., Jack Henry and Globant SA go up and down completely randomly.

Pair Corralation between Jack Henry and Globant SA

Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the Globant SA. But the stock apears to be less risky and, when comparing its historical volatility, Jack Henry Associates is 2.9 times less risky than Globant SA. The stock trades about -0.13 of its potential returns per unit of risk. The Globant SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  21,174  in Globant SA on October 15, 2024 and sell it today you would lose (426.00) from holding Globant SA or give up 2.01% of portfolio value over 90 days.

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

Jack Henry Associates  vs.  Globant SA

Jack Henry Associates

Risk-Adjusted Performance

0 of 100

Very 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 latest inconsistent performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Globant SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globant SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Globant SA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jack Henry and Globant SA

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

The idea behind Jack Henry Associates and Globant SA 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 Transaction History module to view history of all your transactions and understand their impact on performance.