Correlation Between Jackson Financial and Sanlam
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Sanlam 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 Sanlam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Sanlam Ltd PK, you can compare the effects of market volatilities on Jackson Financial and Sanlam 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 Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Sanlam.
Diversification Opportunities for Jackson Financial and Sanlam
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jackson and Sanlam is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK 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 Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of Jackson Financial i.e., Jackson Financial and Sanlam go up and down completely randomly.
Pair Corralation between Jackson Financial and Sanlam
Assuming the 90 days trading horizon Jackson Financial is expected to generate 2.66 times less return on investment than Sanlam. But when comparing it to its historical volatility, Jackson Financial is 1.9 times less risky than Sanlam. It trades about 0.05 of its potential returns per unit of risk. Sanlam Ltd PK is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Sanlam Ltd PK on August 31, 2024 and sell it today you would earn a total of 425.00 from holding Sanlam Ltd PK or generate 77.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.03% |
| Values | Daily Returns |
Jackson Financial vs. Sanlam Ltd PK
Performance |
| Timeline |
| Jackson Financial |
| Sanlam Ltd PK |
Jackson Financial and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Sanlam
The main advantage of trading using opposite Jackson Financial and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam's long position.| Jackson Financial vs. FG Annuities Life | Jackson Financial vs. Globe Life | Jackson Financial vs. MetLife Preferred Stock | Jackson Financial vs. MetLife Preferred Stock |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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