Correlation Between ChampionX and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both ChampionX and Jackson 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 ChampionX and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Jackson Financial, you can compare the effects of market volatilities on ChampionX and Jackson 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 ChampionX with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Jackson Financial.
Diversification Opportunities for ChampionX and Jackson Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ChampionX and Jackson is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and ChampionX 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 ChampionX are associated (or correlated) with Jackson Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Financial has no effect on the direction of ChampionX i.e., ChampionX and Jackson Financial go up and down completely randomly.
Pair Corralation between ChampionX and Jackson Financial
Considering the 90-day investment horizon ChampionX is expected to generate 2.87 times more return on investment than Jackson Financial. However, ChampionX is 2.87 times more volatile than Jackson Financial. It trades about 0.11 of its potential returns per unit of risk. Jackson Financial is currently generating about -0.01 per unit of risk. If you would invest 2,661 in ChampionX on December 30, 2024 and sell it today you would earn a total of 326.00 from holding ChampionX or generate 12.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ChampionX vs. Jackson Financial
Performance |
Timeline |
ChampionX |
Jackson Financial |
ChampionX and Jackson Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ChampionX and Jackson Financial
The main advantage of trading using opposite ChampionX and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Jackson 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 Jackson Financial will offset losses from the drop in Jackson Financial's long position.ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
Jackson Financial vs. United Parks Resorts | Jackson Financial vs. BBB Foods | Jackson Financial vs. Cosan SA ADR | Jackson Financial vs. ANTA Sports Products |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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