Correlation Between Jackson Financial and Aflac Incorporated

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

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

Diversification Opportunities for Jackson Financial and Aflac Incorporated

0.0

Correlation Coefficient

Jackson Financial  Aflac Incorporated

Pay attention - limited upside

The 3 months correlation between Jackson and Aflac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated 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 Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of Jackson Financial i.e., Jackson Financial and Aflac Incorporated go up and down completely randomly.

Pair Corralation between Jackson Financial and Aflac Incorporated

If you would invest  10,986  in Aflac Incorporated on August 30, 2024 and sell it today you would earn a total of  424.00  from holding Aflac Incorporated or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Jackson Financial  vs.  Aflac Incorporated

Jackson Financial

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Jackson Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Jackson Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Aflac Incorporated

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aflac Incorporated are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Aflac Incorporated is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Jackson Financial and Aflac Incorporated

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

The idea behind Jackson Financial and Aflac Incorporated 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.