Correlation Between CNO Financial and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both CNO 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 CNO 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 CNO Financial Group and Jackson Financial, you can compare the effects of market volatilities on CNO 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 CNO Financial with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNO Financial and Jackson Financial.
Diversification Opportunities for CNO Financial and Jackson Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNO and Jackson is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CNO Financial Group and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and CNO 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 CNO Financial 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 CNO Financial i.e., CNO Financial and Jackson Financial go up and down completely randomly.
Pair Corralation between CNO Financial and Jackson Financial
Considering the 90-day investment horizon CNO Financial Group is expected to generate 0.71 times more return on investment than Jackson Financial. However, CNO Financial Group is 1.4 times less risky than Jackson Financial. It trades about 0.24 of its potential returns per unit of risk. Jackson Financial is currently generating about -0.01 per unit of risk. If you would invest 3,506 in CNO Financial Group on August 31, 2024 and sell it today you would earn a total of 510.00 from holding CNO Financial Group or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNO Financial Group vs. Jackson Financial
Performance |
| Timeline |
| CNO Financial Group |
| Jackson Financial |
CNO Financial and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNO Financial and Jackson Financial
The main advantage of trading using opposite CNO Financial and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNO 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.| CNO Financial vs. MetLife Preferred Stock | CNO Financial vs. FG Annuities Life | CNO Financial vs. Prudential Public Limited | CNO Financial vs. MetLife Preferred Stock |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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