Correlation Between Jackson Financial and Stolt Nielsen
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Stolt Nielsen 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 Stolt Nielsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Stolt Nielsen Limited, you can compare the effects of market volatilities on Jackson Financial and Stolt Nielsen 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 Stolt Nielsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Stolt Nielsen.
Diversification Opportunities for Jackson Financial and Stolt Nielsen
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jackson and Stolt is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Stolt Nielsen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stolt Nielsen Limited 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 Stolt Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stolt Nielsen Limited has no effect on the direction of Jackson Financial i.e., Jackson Financial and Stolt Nielsen go up and down completely randomly.
Pair Corralation between Jackson Financial and Stolt Nielsen
Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.15 times more return on investment than Stolt Nielsen. However, Jackson Financial is 6.66 times less risky than Stolt Nielsen. It trades about 0.09 of its potential returns per unit of risk. Stolt Nielsen Limited is currently generating about -0.16 per unit of risk. If you would invest 2,689 in Jackson Financial on September 5, 2024 and sell it today you would earn a total of 48.00 from holding Jackson Financial or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jackson Financial vs. Stolt Nielsen Limited
Performance |
| Timeline |
| Jackson Financial |
| Stolt Nielsen Limited |
Jackson Financial and Stolt Nielsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Stolt Nielsen
The main advantage of trading using opposite Jackson Financial and Stolt Nielsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Stolt Nielsen 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 Stolt Nielsen will offset losses from the drop in Stolt Nielsen's long position.| Jackson Financial vs. NRG Energy | Jackson Financial vs. United Utilities Group | Jackson Financial vs. Aris Water Solutions | Jackson Financial vs. Western Midstream Partners |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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