Correlation Between PayPal Holdings and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both PayPal Holdings 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 PayPal Holdings and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PayPal Holdings and Jackson Financial, you can compare the effects of market volatilities on PayPal Holdings 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 PayPal Holdings with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and Jackson Financial.
Diversification Opportunities for PayPal Holdings and Jackson Financial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PayPal and Jackson is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and PayPal Holdings 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 PayPal Holdings 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 PayPal Holdings i.e., PayPal Holdings and Jackson Financial go up and down completely randomly.
Pair Corralation between PayPal Holdings and Jackson Financial
Given the investment horizon of 90 days PayPal Holdings is expected to under-perform the Jackson Financial. In addition to that, PayPal Holdings is 3.59 times more volatile than Jackson Financial. It trades about -0.11 of its total potential returns per unit of risk. Jackson Financial is currently generating about -0.03 per unit of volatility. If you would invest 2,680 in Jackson Financial on December 2, 2024 and sell it today you would lose (43.00) from holding Jackson Financial or give up 1.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PayPal Holdings vs. Jackson Financial
Performance |
Timeline |
PayPal Holdings |
Jackson Financial |
PayPal Holdings and Jackson Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PayPal Holdings and Jackson Financial
The main advantage of trading using opposite PayPal Holdings and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings 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.PayPal Holdings vs. SoFi Technologies | PayPal Holdings vs. Visa Class A | PayPal Holdings vs. Mastercard | PayPal Holdings vs. Capital One Financial |
Jackson Financial vs. nLIGHT Inc | Jackson Financial vs. Trio Tech International | Jackson Financial vs. Coda Octopus Group | Jackson Financial vs. Allient |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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