Correlation Between Tyler Technologies, and Jefferies Financial

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Can any of the company-specific risk be diversified away by investing in both Tyler Technologies, and Jefferies Financial 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 Tyler Technologies, and Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyler Technologies, and Jefferies Financial Group, you can compare the effects of market volatilities on Tyler Technologies, and Jefferies Financial 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 Tyler Technologies, with a short position of Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyler Technologies, and Jefferies Financial.

Diversification Opportunities for Tyler Technologies, and Jefferies Financial

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Tyler and Jefferies is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tyler Technologies, and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and Tyler Technologies, 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 Tyler Technologies, are associated (or correlated) with Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Tyler Technologies, i.e., Tyler Technologies, and Jefferies Financial go up and down completely randomly.

Pair Corralation between Tyler Technologies, and Jefferies Financial

Assuming the 90 days trading horizon Tyler Technologies, is expected to under-perform the Jefferies Financial. But the stock apears to be less risky and, when comparing its historical volatility, Tyler Technologies, is 1.61 times less risky than Jefferies Financial. The stock trades about -0.24 of its potential returns per unit of risk. The Jefferies Financial Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  48,575  in Jefferies Financial Group on October 8, 2024 and sell it today you would earn a total of  131.00  from holding Jefferies Financial Group or generate 0.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy88.24%
ValuesDaily Returns

Tyler Technologies,  vs.  Jefferies Financial Group

 Performance 
       Timeline  
Tyler Technologies, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days Tyler Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Tyler Technologies, sustained solid returns over the last few months and may actually be approaching a breakup point.
Jefferies Financial 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Jefferies Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Tyler Technologies, and Jefferies Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tyler Technologies, and Jefferies Financial

The main advantage of trading using opposite Tyler Technologies, and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyler Technologies, position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.
The idea behind Tyler Technologies, and Jefferies Financial Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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