Correlation Between Jackson Financial and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both Jackson Financial and Manulife Financial 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 Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jackson Financial and Manulife Financial, you can compare the effects of market volatilities on Jackson Financial and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and Manulife Financial.
Diversification Opportunities for Jackson Financial and Manulife Financial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jackson and Manulife is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial has no effect on the direction of Jackson Financial i.e., Jackson Financial and Manulife Financial go up and down completely randomly.
Pair Corralation between Jackson Financial and Manulife Financial
Considering the 90-day investment horizon Jackson Financial is expected to generate 6.16 times more return on investment than Manulife Financial. However, Jackson Financial is 6.16 times more volatile than Manulife Financial. It trades about 0.14 of its potential returns per unit of risk. Manulife Financial is currently generating about 0.15 per unit of risk. If you would invest 4,679 in Jackson Financial on September 2, 2024 and sell it today you would earn a total of 5,340 from holding Jackson Financial or generate 114.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jackson Financial vs. Manulife Financial
Performance |
| Timeline |
| Jackson Financial |
| Manulife Financial |
Jackson Financial and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jackson Financial and Manulife Financial
The main advantage of trading using opposite Jackson Financial and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, Manulife Financial 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| Jackson Financial vs. Prudential Financial | Jackson Financial vs. MetLife | Jackson Financial vs. Unum Group | Jackson Financial vs. Manulife Financial Corp |
| Manulife Financial vs. Jackson Financial | Manulife Financial vs. Sanlam Ltd PK | Manulife Financial vs. CNO Financial Group | Manulife Financial vs. Genworth Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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