Correlation Between Nomura Research and Jack Henry

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

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

Diversification Opportunities for Nomura Research and Jack Henry

0.17

Correlation Coefficient

Nomura Research  Jack Henry

Average diversification

The 3 months correlation between Nomura and Jack is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Research Institute 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 Nomura Research 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 Nomura Research Institute 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 Nomura Research i.e., Nomura Research and Jack Henry go up and down completely randomly.

Pair Corralation between Nomura Research and Jack Henry

Assuming the 90 days horizon Nomura Research is expected to generate 1.09 times less return on investment than Jack Henry. In addition to that, Nomura Research is 2.07 times more volatile than Jack Henry Associates. It trades about 0.11 of its total potential returns per unit of risk. Jack Henry Associates is currently generating about 0.24 per unit of volatility. If you would invest  17,152  in Jack Henry Associates on September 18, 2024 and sell it today you would earn a total of  656.00  from holding Jack Henry Associates or generate 3.82% return on investment over 90 days.

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

Nomura Research Institute  vs.  Jack Henry Associates

Nomura Research Institute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomura Research Institute has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jack Henry Associates

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jack Henry Associates are ranked lower than 3 (%) 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 Nomura Research and Jack Henry

The main advantage of trading using opposite Nomura Research and Jack Henry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Research 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 Nomura Research Institute 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.