Correlation Between Jackson Financial and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Midwest Holding 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 Midwest Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Midwest Holding, you can compare the effects of market volatilities on Jackson Financial and Midwest Holding 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 Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Midwest Holding.
Diversification Opportunities for Jackson Financial and Midwest Holding
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jackson and Midwest is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding 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 Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of Jackson Financial i.e., Jackson Financial and Midwest Holding go up and down completely randomly.
Pair Corralation between Jackson Financial and Midwest Holding
Considering the 90-day investment horizon Jackson Financial is expected to generate 3.19 times more return on investment than Midwest Holding. However, Jackson Financial is 3.19 times more volatile than Midwest Holding. It trades about 0.15 of its potential returns per unit of risk. Midwest Holding is currently generating about 0.11 per unit of risk. If you would invest 2,830 in Jackson Financial on August 31, 2024 and sell it today you would earn a total of 7,189 from holding Jackson Financial or generate 254.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Jackson Financial vs. Midwest Holding
Performance |
| Timeline |
| Jackson Financial |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jackson Financial and Midwest Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Midwest Holding
The main advantage of trading using opposite Jackson Financial and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.| Jackson Financial vs. Prudential Financial | Jackson Financial vs. MetLife | Jackson Financial vs. Unum Group | Jackson Financial vs. Manulife Financial Corp |
| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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