Correlation Between Genworth Financial and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Genworth 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 Genworth 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 Genworth Financial and Jackson Financial, you can compare the effects of market volatilities on Genworth 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 Genworth Financial with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and Jackson Financial.
Diversification Opportunities for Genworth Financial and Jackson Financial
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genworth and Jackson is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Genworth 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 Genworth 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 Genworth Financial i.e., Genworth Financial and Jackson Financial go up and down completely randomly.
Pair Corralation between Genworth Financial and Jackson Financial
Considering the 90-day investment horizon Genworth Financial is expected to generate 0.58 times more return on investment than Jackson Financial. However, Genworth Financial is 1.72 times less risky than Jackson Financial. It trades about 0.27 of its potential returns per unit of risk. Jackson Financial is currently generating about -0.01 per unit of risk. If you would invest 685.00 in Genworth Financial on August 31, 2024 and sell it today you would earn a total of 94.00 from holding Genworth Financial or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genworth Financial vs. Jackson Financial
Performance |
| Timeline |
| Genworth Financial |
| Jackson Financial |
Genworth Financial and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and Jackson Financial
The main advantage of trading using opposite Genworth Financial and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth 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.| Genworth Financial vs. MetLife Preferred Stock | Genworth Financial vs. Prudential Public Limited | Genworth Financial vs. Primerica | Genworth Financial vs. CNO Financial Group |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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