Correlation Between Jack Henry and WNS Holdings

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

Diversification Opportunities for Jack Henry and WNS Holdings

0.2

Correlation Coefficient

Jack Henry  WNS Holdings

Modest diversification

The 3 months correlation between Jack and WNS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings 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 WNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WNS Holdings has no effect on the direction of Jack Henry i.e., Jack Henry and WNS Holdings go up and down completely randomly.

Pair Corralation between Jack Henry and WNS Holdings

Given the investment horizon of 90 days Jack Henry is expected to generate 15.39 times less return on investment than WNS Holdings. But when comparing it to its historical volatility, Jack Henry Associates is 2.24 times less risky than WNS Holdings. It trades about 0.02 of its potential returns per unit of risk. WNS Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,728  in WNS Holdings on December 26, 2024 and sell it today you would earn a total of  1,608  from holding WNS Holdings or generate 34.01% return on investment over 90 days.

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

Jack Henry Associates  vs.  WNS Holdings

Jack Henry Associates

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack Henry Associates are ranked lower than 1 (%) 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.

WNS Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, WNS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jack Henry and WNS Holdings

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

The idea behind Jack Henry Associates and WNS Holdings 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.