Correlation Between American Picture and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both American Picture 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 American Picture and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Picture House and Jackson Financial, you can compare the effects of market volatilities on American Picture 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 American Picture with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Picture and Jackson Financial.
Diversification Opportunities for American Picture and Jackson Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Jackson is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Picture House and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and American Picture 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 American Picture House 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 American Picture i.e., American Picture and Jackson Financial go up and down completely randomly.
Pair Corralation between American Picture and Jackson Financial
Given the investment horizon of 90 days American Picture House is expected to generate 18.72 times more return on investment than Jackson Financial. However, American Picture is 18.72 times more volatile than Jackson Financial. It trades about 0.05 of its potential returns per unit of risk. Jackson Financial is currently generating about 0.1 per unit of risk. If you would invest 23.00 in American Picture House on September 3, 2024 and sell it today you would earn a total of 2.00 from holding American Picture House or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Picture House vs. Jackson Financial
Performance |
| Timeline |
| American Picture House |
| Jackson Financial |
American Picture and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Picture and Jackson Financial
The main advantage of trading using opposite American Picture and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Picture 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.| American Picture vs. Jackson Financial | American Picture vs. MetLife | American Picture vs. McDonalds | American Picture vs. Alcoa Corp |
| Jackson Financial vs. Analog Devices | Jackson Financial vs. Tencent Music Entertainment | Jackson Financial vs. RBC Bearings Incorporated | Jackson Financial vs. BioNTech SE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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