Correlation Between Jackson Financial and Freedom Holdings
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Freedom Holdings 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 Freedom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Freedom Holdings, you can compare the effects of market volatilities on Jackson Financial and Freedom Holdings 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 Freedom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Freedom Holdings.
Diversification Opportunities for Jackson Financial and Freedom Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jackson and Freedom is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Freedom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holdings 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 Freedom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holdings has no effect on the direction of Jackson Financial i.e., Jackson Financial and Freedom Holdings go up and down completely randomly.
Pair Corralation between Jackson Financial and Freedom Holdings
Assuming the 90 days trading horizon Jackson Financial is expected to generate 63.82 times less return on investment than Freedom Holdings. But when comparing it to its historical volatility, Jackson Financial is 48.21 times less risky than Freedom Holdings. It trades about 0.08 of its potential returns per unit of risk. Freedom Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Freedom Holdings on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Freedom Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jackson Financial vs. Freedom Holdings
Performance |
| Timeline |
| Jackson Financial |
| Freedom Holdings |
Jackson Financial and Freedom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Freedom Holdings
The main advantage of trading using opposite Jackson Financial and Freedom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Freedom Holdings 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 Freedom Holdings will offset losses from the drop in Freedom Holdings' long position.| Jackson Financial vs. Analog Devices | Jackson Financial vs. Tencent Music Entertainment | Jackson Financial vs. RBC Bearings Incorporated | Jackson Financial vs. BioNTech SE |
| Freedom Holdings vs. RTL Group SA | Freedom Holdings vs. ITV plc | Freedom Holdings vs. ITV PLC ADR | Freedom Holdings vs. iHeartMedia |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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