Correlation Between Jackson Financial and APA
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and APA 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 Jackson Financial and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and APA Group, you can compare the effects of market volatilities on Jackson Financial and APA 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 Jackson Financial with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and APA.
Diversification Opportunities for Jackson Financial and APA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jackson and APA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group and Jackson 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 Jackson Financial are associated (or correlated) with APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of Jackson Financial i.e., Jackson Financial and APA go up and down completely randomly.
Pair Corralation between Jackson Financial and APA
Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.17 times more return on investment than APA. However, Jackson Financial is 5.97 times less risky than APA. It trades about 0.09 of its potential returns per unit of risk. APA Group is currently generating about 0.01 per unit of risk. If you would invest 2,239 in Jackson Financial on September 12, 2024 and sell it today you would earn a total of 446.00 from holding Jackson Financial or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.03% |
| Values | Daily Returns |
Jackson Financial vs. APA Group
Performance |
| Timeline |
| Jackson Financial |
| APA Group |
Jackson Financial and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and APA
The main advantage of trading using opposite Jackson Financial and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.| Jackson Financial vs. Everus Construction Group | Jackson Financial vs. EMCOR Group | Jackson Financial vs. Plexus Corp | Jackson Financial vs. ChampionX |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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