Correlation Between Jackson Financial and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Eiffage SA 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 Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Eiffage SA, you can compare the effects of market volatilities on Jackson Financial and Eiffage SA 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 Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Eiffage SA.
Diversification Opportunities for Jackson Financial and Eiffage SA
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jackson and Eiffage is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Jackson Financial i.e., Jackson Financial and Eiffage SA go up and down completely randomly.
Pair Corralation between Jackson Financial and Eiffage SA
Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.46 times more return on investment than Eiffage SA. However, Jackson Financial is 2.16 times less risky than Eiffage SA. It trades about 0.05 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.02 per unit of risk. If you would invest 2,208 in Jackson Financial on September 3, 2024 and sell it today you would earn a total of 522.00 from holding Jackson Financial or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.77% |
| Values | Daily Returns |
Jackson Financial vs. Eiffage SA
Performance |
| Timeline |
| Jackson Financial |
| Eiffage SA |
Jackson Financial and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Eiffage SA
The main advantage of trading using opposite Jackson Financial and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Jackson Financial vs. Analog Devices | Jackson Financial vs. Tencent Music Entertainment | Jackson Financial vs. RBC Bearings Incorporated | Jackson Financial vs. BioNTech SE |
| Eiffage SA vs. Travis Perkins PLC | Eiffage SA vs. Antelope Enterprise Holdings | Eiffage SA vs. Intelligent Living Application | Eiffage SA vs. Beacon Roofing Supply |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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