Correlation Between Network Media and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Network Media 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 Network Media and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network Media Group and Jackson Financial, you can compare the effects of market volatilities on Network Media 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 Network Media with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Jackson Financial.
Diversification Opportunities for Network Media and Jackson Financial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Network and Jackson is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Network Media 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 Network Media Group 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 Network Media i.e., Network Media and Jackson Financial go up and down completely randomly.
Pair Corralation between Network Media and Jackson Financial
Assuming the 90 days horizon Network Media Group is expected to under-perform the Jackson Financial. In addition to that, Network Media is 13.9 times more volatile than Jackson Financial. It trades about -0.17 of its total potential returns per unit of risk. Jackson Financial is currently generating about 0.1 per unit of volatility. If you would invest 2,603 in Jackson Financial on September 12, 2024 and sell it today you would earn a total of 82.00 from holding Jackson Financial or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Network Media Group vs. Jackson Financial
Performance |
| Timeline |
| Network Media Group |
| Jackson Financial |
Network Media and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network Media and Jackson Financial
The main advantage of trading using opposite Network Media and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network Media 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.| Network Media vs. Roku Inc | Network Media vs. SNM Gobal Holdings | Network Media vs. Seven Arts Entertainment | Network Media vs. All For One |
| Jackson Financial vs. Everus Construction Group | Jackson Financial vs. EMCOR Group | Jackson Financial vs. Plexus Corp | Jackson Financial vs. ChampionX |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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