Correlation Between Employers Holdings and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Employers Holdings 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 Employers Holdings and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Employers Holdings and Jackson Financial, you can compare the effects of market volatilities on Employers Holdings 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 Employers Holdings with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Employers Holdings and Jackson Financial.
Diversification Opportunities for Employers Holdings and Jackson Financial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Employers and Jackson is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Employers Holdings and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Employers Holdings 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 Employers Holdings 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 Employers Holdings i.e., Employers Holdings and Jackson Financial go up and down completely randomly.
Pair Corralation between Employers Holdings and Jackson Financial
Considering the 90-day investment horizon Employers Holdings is expected to under-perform the Jackson Financial. In addition to that, Employers Holdings is 1.57 times more volatile than Jackson Financial. It trades about -0.11 of its total potential returns per unit of risk. Jackson Financial is currently generating about 0.09 per unit of volatility. If you would invest 2,665 in Jackson Financial on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Jackson Financial or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Employers Holdings vs. Jackson Financial
Performance |
| Timeline |
| Employers Holdings |
| Jackson Financial |
Employers Holdings and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Employers Holdings and Jackson Financial
The main advantage of trading using opposite Employers Holdings and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Employers Holdings 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.| Employers Holdings vs. ICC Holdings | Employers Holdings vs. AMERISAFE | Employers Holdings vs. NMI Holdings | Employers Holdings vs. Investors Title |
| Jackson Financial vs. CDW Corp | Jackson Financial vs. World Houseware Limited | Jackson Financial vs. Q2 Holdings | Jackson Financial vs. Steven Madden |
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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