Correlation Between Brighthouse Financial and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial 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 Brighthouse Financial and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Jackson Financial, you can compare the effects of market volatilities on Brighthouse Financial 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 Brighthouse Financial with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Jackson Financial.
Diversification Opportunities for Brighthouse Financial and Jackson Financial
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brighthouse and Jackson is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Brighthouse 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 Brighthouse Financial 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 Brighthouse Financial i.e., Brighthouse Financial and Jackson Financial go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Jackson Financial
Assuming the 90 days horizon Brighthouse Financial is expected to under-perform the Jackson Financial. In addition to that, Brighthouse Financial is 2.05 times more volatile than Jackson Financial. It trades about -0.16 of its total potential returns per unit of risk. Jackson Financial is currently generating about -0.02 per unit of volatility. If you would invest 2,711 in Jackson Financial on August 24, 2024 and sell it today you would lose (7.00) from holding Jackson Financial or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brighthouse Financial vs. Jackson Financial
Performance |
| Timeline |
| Brighthouse Financial |
| Jackson Financial |
Brighthouse Financial and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Jackson Financial
The main advantage of trading using opposite Brighthouse Financial and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial 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.| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. MetLife Preferred Stock | Brighthouse Financial vs. Morgan Stanley |
| Jackson Financial vs. MetLife Preferred Stock | Jackson Financial vs. MetLife Preferred Stock | Jackson Financial vs. Brighthouse Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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