Correlation Between Jackson Financial and Prologis

Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Prologis 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 Prologis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jackson Financial and Prologis, you can compare the effects of market volatilities on Jackson Financial and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Prologis.

Diversification Opportunities for Jackson Financial and Prologis

-0.56

Correlation Coefficient

Jackson Financial  Prologis

Excellent diversification

The 3 months correlation between Jackson and Prologis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Jackson Financial i.e., Jackson Financial and Prologis go up and down completely randomly.

Pair Corralation between Jackson Financial and Prologis

Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.25 times more return on investment than Prologis. However, Jackson Financial is 3.98 times less risky than Prologis. It trades about 0.18 of its potential returns per unit of risk. Prologis is currently generating about -0.03 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 Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jackson Financial  vs.  Prologis

Jackson Financial

Risk-Adjusted Performance

13 of 100

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.

Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jackson Financial and Prologis

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

The idea behind Jackson Financial and Prologis 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.