Correlation Between Midwest Holding and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Midwest Holding and Jackson 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 Midwest Holding and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midwest Holding and Jackson Financial, you can compare the effects of market volatilities on Midwest Holding and Jackson 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 Midwest Holding with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midwest Holding and Jackson Financial.
Diversification Opportunities for Midwest Holding and Jackson Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Midwest and Jackson is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Midwest Holding and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Midwest Holding 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 Midwest Holding are associated (or correlated) with Jackson Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Financial has no effect on the direction of Midwest Holding i.e., Midwest Holding and Jackson Financial go up and down completely randomly.
Pair Corralation between Midwest Holding and Jackson Financial
Given the investment horizon of 90 days Midwest Holding is expected to under-perform the Jackson Financial. But the stock apears to be less risky and, when comparing its historical volatility, Midwest Holding is 2.29 times less risky than Jackson Financial. The stock trades about -0.12 of its potential returns per unit of risk. The Jackson Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,255 in Jackson Financial on August 28, 2024 and sell it today you would earn a total of 467.00 from holding Jackson Financial or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.24% |
| Values | Daily Returns |
Midwest Holding vs. Jackson Financial
Performance |
| Timeline |
| Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jackson Financial |
Midwest Holding and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midwest Holding and Jackson Financial
The main advantage of trading using opposite Midwest Holding and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midwest Holding position performs unexpectedly, Jackson 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 Jackson Financial will offset losses from the drop in Jackson Financial's long position.| Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
| Jackson Financial vs. Radcom | Jackson Financial vs. Kandi Technologies Group | Jackson Financial vs. Sphere Entertainment Co | Jackson Financial vs. Ambev SA ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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