Correlation Between Jack Henry and Thoughtworks Holding

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

Diversification Opportunities for Jack Henry and Thoughtworks Holding

-0.67

Correlation Coefficient

Jack Henry  Thoughtworks Holding

Excellent diversification

The 3 months correlation between Jack and Thoughtworks is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and Thoughtworks Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoughtworks Holding 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 Thoughtworks Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoughtworks Holding has no effect on the direction of Jack Henry i.e., Jack Henry and Thoughtworks Holding go up and down completely randomly.

Pair Corralation between Jack Henry and Thoughtworks Holding

Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the Thoughtworks Holding. In addition to that, Jack Henry is 1.63 times more volatile than Thoughtworks Holding. It trades about -0.13 of its total potential returns per unit of risk. Thoughtworks Holding is currently generating about 0.08 per unit of volatility. If you would invest  443.00  in Thoughtworks Holding on October 15, 2024 and sell it today you would earn a total of  4.00  from holding Thoughtworks Holding or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	36.07%
Values	Daily Returns

Jack Henry Associates  vs.  Thoughtworks Holding

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.

Thoughtworks Holding

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Thoughtworks Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Thoughtworks Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jack Henry and Thoughtworks Holding

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

The idea behind Jack Henry Associates and Thoughtworks Holding 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.