Correlation Between Jackson Financial and Ambase Corp

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

Diversification Opportunities for Jackson Financial and Ambase Corp

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Jackson and Ambase is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Ambase Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambase Corp and Jackson Financial 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 Jackson Financial are associated (or correlated) with Ambase Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambase Corp has no effect on the direction of Jackson Financial i.e., Jackson Financial and Ambase Corp go up and down completely randomly.

Pair Corralation between Jackson Financial and Ambase Corp

Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.14 times more return on investment than Ambase Corp. However, Jackson Financial is 7.26 times less risky than Ambase Corp. It trades about 0.18 of its potential returns per unit of risk. Ambase Corp is currently generating about 0.0 per unit of risk. If you would invest  2,592  in Jackson Financial on September 3, 2024 and sell it today you would earn a total of  155.00  from holding Jackson Financial or generate 5.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Jackson Financial  vs.  Ambase Corp

 Performance 
       Timeline  
Jackson Financial 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jackson Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jackson Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Ambase Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ambase Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Ambase Corp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Jackson Financial and Ambase Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jackson Financial and Ambase Corp

The main advantage of trading using opposite Jackson Financial and Ambase Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Ambase Corp 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 Ambase Corp will offset losses from the drop in Ambase Corp's long position.
The idea behind Jackson Financial and Ambase Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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