Correlation Between Abacus Life and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Abacus Life 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 Abacus Life and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abacus Life and Jackson Financial, you can compare the effects of market volatilities on Abacus Life 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 Abacus Life with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life and Jackson Financial.
Diversification Opportunities for Abacus Life and Jackson Financial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abacus and Jackson is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Abacus Life 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 Abacus Life 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 Abacus Life i.e., Abacus Life and Jackson Financial go up and down completely randomly.
Pair Corralation between Abacus Life and Jackson Financial
Considering the 90-day investment horizon Abacus Life is expected to generate 11.1 times less return on investment than Jackson Financial. In addition to that, Abacus Life is 1.5 times more volatile than Jackson Financial. It trades about 0.01 of its total potential returns per unit of risk. Jackson Financial is currently generating about 0.1 per unit of volatility. If you would invest 3,284 in Jackson Financial on September 4, 2024 and sell it today you would earn a total of 6,754 from holding Jackson Financial or generate 205.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abacus Life vs. Jackson Financial
Performance |
| Timeline |
| Abacus Life |
| Jackson Financial |
Abacus Life and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abacus Life and Jackson Financial
The main advantage of trading using opposite Abacus Life and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life 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.| Abacus Life vs. Shake Shack | Abacus Life vs. Where Food Comes | Abacus Life vs. First Watch Restaurant | Abacus Life vs. FitLife Brands, Common |
| Jackson Financial vs. Prudential Financial | Jackson Financial vs. MetLife | Jackson Financial vs. Unum Group | Jackson Financial vs. Manulife Financial Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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