Correlation Between Jackson Financial and Grindrod
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Grindrod 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 Grindrod into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Grindrod Ltd ADR, you can compare the effects of market volatilities on Jackson Financial and Grindrod 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 Grindrod. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Grindrod.
Diversification Opportunities for Jackson Financial and Grindrod
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jackson and Grindrod is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Grindrod Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindrod ADR 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 Grindrod. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindrod ADR has no effect on the direction of Jackson Financial i.e., Jackson Financial and Grindrod go up and down completely randomly.
Pair Corralation between Jackson Financial and Grindrod
Assuming the 90 days trading horizon Jackson Financial is expected to generate 8.53 times more return on investment than Grindrod. However, Jackson Financial is 8.53 times more volatile than Grindrod Ltd ADR. It trades about 0.09 of its potential returns per unit of risk. Grindrod Ltd ADR is currently generating about 0.08 per unit of risk. If you would invest 2,296 in Jackson Financial on September 4, 2024 and sell it today you would earn a total of 434.00 from holding Jackson Financial or generate 18.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
Jackson Financial vs. Grindrod Ltd ADR
Performance |
| Timeline |
| Jackson Financial |
| Grindrod ADR |
Jackson Financial and Grindrod Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Grindrod
The main advantage of trading using opposite Jackson Financial and Grindrod positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Grindrod 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 Grindrod will offset losses from the drop in Grindrod's long position.| Jackson Financial vs. Asure Software | Jackson Financial vs. Assurant | Jackson Financial vs. Sun Life Financial | Jackson Financial vs. GoHealth |
| Grindrod vs. NETGEAR | Grindrod vs. Valneva SE ADR | Grindrod vs. Radcom | Grindrod vs. Everspin Technologies |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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