Correlation Between Jack Henry and VerifyMe

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

Diversification Opportunities for Jack Henry and VerifyMe

-0.77

Correlation Coefficient

Jack Henry  VerifyMe

Pay attention - limited upside

The 3 months correlation between Jack and VerifyMe is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jack Henry Associates and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Jack Henry i.e., Jack Henry and VerifyMe go up and down completely randomly.

Pair Corralation between Jack Henry and VerifyMe

Given the investment horizon of 90 days Jack Henry Associates is expected to under-perform the VerifyMe. But the stock apears to be less risky and, when comparing its historical volatility, Jack Henry Associates is 6.04 times less risky than VerifyMe. The stock trades about -0.03 of its potential returns per unit of risk. The VerifyMe is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  123.00  in VerifyMe on February 19, 2024 and sell it today you would earn a total of  48.00  from holding VerifyMe or generate 39.02% return on investment over 90 days.

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

Jack Henry Associates  vs.  VerifyMe

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.

VerifyMe

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VerifyMe are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, VerifyMe exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jack Henry and VerifyMe

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

The idea behind Jack Henry Associates and VerifyMe 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.

Check out your portfolio center.

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.