Correlation Between Jackson Financial and SOCGEN

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

By analyzing existing cross correlation between Jackson Financial and SOCGEN 2889 09 JUN 32, you can compare the effects of market volatilities on Jackson Financial and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and SOCGEN.

Diversification Opportunities for Jackson Financial and SOCGEN

0.19

Correlation Coefficient

Jackson Financial  SOCGEN

Average diversification

The 3 months correlation between Jackson and SOCGEN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and SOCGEN 2889 09 JUN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 2889 09 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 2889 09 has no effect on the direction of Jackson Financial i.e., Jackson Financial and SOCGEN go up and down completely randomly.

Pair Corralation between Jackson Financial and SOCGEN

Assuming the 90 days trading horizon Jackson Financial is expected to under-perform the SOCGEN. In addition to that, Jackson Financial is 1.4 times more volatile than SOCGEN 2889 09 JUN 32. It trades about -0.03 of its total potential returns per unit of risk. SOCGEN 2889 09 JUN 32 is currently generating about 0.09 per unit of volatility. If you would invest  8,524  in SOCGEN 2889 09 JUN 32 on December 1, 2024 and sell it today you would earn a total of  105.00  from holding SOCGEN 2889 09 JUN 32 or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	46.67%
Values	Daily Returns

Jackson Financial  vs.  SOCGEN 2889 09 JUN 32

Jackson Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jackson Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jackson Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SOCGEN 2889 09

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOCGEN 2889 09 JUN 32 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jackson Financial and SOCGEN

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

The idea behind Jackson Financial and SOCGEN 2889 09 JUN 32 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.