Correlation Between Jackson Financial and Union Electric
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Union Electric, you can compare the effects of market volatilities on Jackson Financial and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Union Electric.
Diversification Opportunities for Jackson Financial and Union Electric
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jackson and Union is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Jackson Financial i.e., Jackson Financial and Union Electric go up and down completely randomly.
Pair Corralation between Jackson Financial and Union Electric
Assuming the 90 days trading horizon Jackson Financial is expected to generate 44.01 times less return on investment than Union Electric. But when comparing it to its historical volatility, Jackson Financial is 5.82 times less risky than Union Electric. It trades about 0.02 of its potential returns per unit of risk. Union Electric is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 10,000 in Union Electric on September 4, 2024 and sell it today you would earn a total of 1,000.00 from holding Union Electric or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jackson Financial vs. Union Electric
Performance |
| Timeline |
| Jackson Financial |
| Union Electric |
Jackson Financial and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Union Electric
The main advantage of trading using opposite Jackson Financial and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.| Jackson Financial vs. Asure Software | Jackson Financial vs. Assurant | Jackson Financial vs. Sun Life Financial | Jackson Financial vs. GoHealth |
| Union Electric vs. Afya | Union Electric vs. NRG Energy | Union Electric vs. CenterPoint Energy | Union Electric vs. Skillful Craftsman Education |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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