Correlation Between Jack Henry and AssetMark Financial

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

Diversification Opportunities for Jack Henry and AssetMark Financial

0.61

Correlation Coefficient

Jack Henry  AssetMark Financial

Poor diversification

The 3 months correlation between Jack and AssetMark is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and AssetMark Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AssetMark Financial 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 AssetMark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AssetMark Financial has no effect on the direction of Jack Henry i.e., Jack Henry and AssetMark Financial go up and down completely randomly.

Pair Corralation between Jack Henry and AssetMark Financial

Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the AssetMark Financial. In addition to that, Jack Henry is 3.78 times more volatile than AssetMark Financial Holdings. It trades about -0.09 of its total potential returns per unit of risk. AssetMark Financial Holdings is currently generating about 0.19 per unit of volatility. If you would invest  3,388  in AssetMark Financial Holdings on March 10, 2024 and sell it today you would earn a total of  40.00  from holding AssetMark Financial Holdings or generate 1.18% return on investment over 90 days.

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

Jack Henry Associates  vs.  AssetMark Financial Holdings

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 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.

AssetMark Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AssetMark Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, AssetMark Financial is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Jack Henry and AssetMark Financial

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

The idea behind Jack Henry Associates and AssetMark Financial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.