Correlation Between Jackson Financial and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Brighthouse 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 Jackson Financial and Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Brighthouse Financial, you can compare the effects of market volatilities on Jackson Financial and Brighthouse 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 Jackson Financial with a short position of Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Brighthouse Financial.
Diversification Opportunities for Jackson Financial and Brighthouse Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jackson and Brighthouse is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial 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 Brighthouse Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighthouse Financial has no effect on the direction of Jackson Financial i.e., Jackson Financial and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Jackson Financial and Brighthouse Financial
Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.43 times more return on investment than Brighthouse Financial. However, Jackson Financial is 2.32 times less risky than Brighthouse Financial. It trades about -0.02 of its potential returns per unit of risk. Brighthouse Financial is currently generating about -0.28 per unit of risk. If you would invest 2,711 in Jackson Financial on August 24, 2024 and sell it today you would lose (7.00) from holding Jackson Financial or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jackson Financial vs. Brighthouse Financial
Performance |
| Timeline |
| Jackson Financial |
| Brighthouse Financial |
Jackson Financial and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Brighthouse Financial
The main advantage of trading using opposite Jackson Financial and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Brighthouse 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 Brighthouse Financial will offset losses from the drop in Brighthouse Financial's long position.| Jackson Financial vs. Western Copper and | Jackson Financial vs. Parker Hannifin | Jackson Financial vs. Royalty Management Holding | Jackson Financial vs. NioCorp Developments Ltd |
| Brighthouse Financial vs. Jackson Financial | Brighthouse Financial vs. MetLife Preferred Stock | Brighthouse Financial vs. Brighthouse Financial | Brighthouse 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |