Correlation Between Steven Madden and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both Steven Madden 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 Steven Madden and Jackson Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Jackson Financial, you can compare the effects of market volatilities on Steven Madden 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 Steven Madden with a short position of Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Jackson Financial.
Diversification Opportunities for Steven Madden and Jackson Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steven and Jackson is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Jackson Financial go up and down completely randomly.
Pair Corralation between Steven Madden and Jackson Financial
Given the investment horizon of 90 days Steven Madden is expected to generate 2.5 times more return on investment than Jackson Financial. However, Steven Madden is 2.5 times more volatile than Jackson Financial. It trades about 0.05 of its potential returns per unit of risk. Jackson Financial is currently generating about 0.09 per unit of risk. If you would invest 3,616 in Steven Madden on September 14, 2024 and sell it today you would earn a total of 751.00 from holding Steven Madden or generate 20.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Steven Madden vs. Jackson Financial
Performance |
| Timeline |
| Steven Madden |
| Jackson Financial |
Steven Madden and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Jackson Financial
The main advantage of trading using opposite Steven Madden and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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.| Steven Madden vs. Deckers Outdoor | Steven Madden vs. On Holding | Steven Madden vs. Crocs Inc | Steven Madden vs. Designer Brands |
| Jackson Financial vs. CDW Corp | Jackson Financial vs. World Houseware Limited | Jackson Financial vs. Q2 Holdings | Jackson Financial vs. Steven Madden |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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