Correlation Between ProtoSource and Jack Henry

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

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

Diversification Opportunities for ProtoSource and Jack Henry

0.0

Correlation Coefficient

ProtoSource  Jack Henry

Pay attention - limited upside

The 3 months correlation between ProtoSource and Jack is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProtoSource 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 ProtoSource 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 ProtoSource 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 ProtoSource i.e., ProtoSource and Jack Henry go up and down completely randomly.

Pair Corralation between ProtoSource and Jack Henry

If you would invest  17,451  in Jack Henry Associates on December 30, 2024 and sell it today you would earn a total of  408.00  from holding Jack Henry Associates or generate 2.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProtoSource  vs.  Jack Henry Associates

ProtoSource

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProtoSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, ProtoSource is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Jack Henry Associates

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack Henry Associates are ranked lower than 2 (%) 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 ProtoSource and Jack Henry

The main advantage of trading using opposite ProtoSource and Jack Henry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProtoSource 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 ProtoSource 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.