Correlation Between Federal Life and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Federal Life 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 Federal Life and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Life Group and Jackson Financial, you can compare the effects of market volatilities on Federal Life 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 Federal Life with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Life and Jackson Financial.
Diversification Opportunities for Federal Life and Jackson Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Jackson is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Federal Life Group and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Federal Life 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 Federal Life 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 Federal Life i.e., Federal Life and Jackson Financial go up and down completely randomly.
Pair Corralation between Federal Life and Jackson Financial
If you would invest 1,082 in Federal Life Group on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Federal Life Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Federal Life Group vs. Jackson Financial
Performance |
| Timeline |
| Federal Life Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jackson Financial |
Federal Life and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Life and Jackson Financial
The main advantage of trading using opposite Federal Life and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Life 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.The idea behind Federal Life Group and Jackson Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |