Correlation Between Avis Budget and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Avis Budget 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 Avis Budget and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avis Budget Group and Jackson Financial, you can compare the effects of market volatilities on Avis Budget 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 Avis Budget with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avis Budget and Jackson Financial.
Diversification Opportunities for Avis Budget and Jackson Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Avis and Jackson is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Avis Budget Group and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Avis Budget 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 Avis Budget Group 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 Avis Budget i.e., Avis Budget and Jackson Financial go up and down completely randomly.
Pair Corralation between Avis Budget and Jackson Financial
Considering the 90-day investment horizon Avis Budget Group is expected to generate 1.95 times more return on investment than Jackson Financial. However, Avis Budget is 1.95 times more volatile than Jackson Financial. It trades about 0.39 of its potential returns per unit of risk. Jackson Financial is currently generating about 0.09 per unit of risk. If you would invest 8,061 in Avis Budget Group on November 1, 2024 and sell it today you would earn a total of 1,303 from holding Avis Budget Group or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Avis Budget Group vs. Jackson Financial
Performance |
| Timeline |
| Avis Budget Group |
| Jackson Financial |
Avis Budget and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avis Budget and Jackson Financial
The main advantage of trading using opposite Avis Budget and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avis Budget 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.| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
| Jackson Financial vs. Qualys Inc | Jackson Financial vs. Ryder System | Jackson Financial vs. GATX Corporation | Jackson Financial vs. Avis Budget Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |