Correlation Between Jackson Financial and America Great

Can any of the company-specific risk be diversified away by investing in both Jackson Financial and America Great 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 America Great into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jackson Financial and America Great Health, you can compare the effects of market volatilities on Jackson Financial and America Great 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 America Great. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jackson Financial and America Great.

Diversification Opportunities for Jackson Financial and America Great

-0.67

Correlation Coefficient

Jackson Financial  America Great

Excellent diversification

The 3 months correlation between Jackson and America is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and America Great Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Great Health 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 America Great. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Great Health has no effect on the direction of Jackson Financial i.e., Jackson Financial and America Great go up and down completely randomly.

Pair Corralation between Jackson Financial and America Great

Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.04 times more return on investment than America Great. However, Jackson Financial is 28.29 times less risky than America Great. It trades about 0.12 of its potential returns per unit of risk. America Great Health is currently generating about -0.11 per unit of risk. If you would invest  2,632  in Jackson Financial on September 5, 2024 and sell it today you would earn a total of  103.00  from holding Jackson Financial or generate 3.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Jackson Financial  vs.  America Great Health

Jackson Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jackson Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jackson Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

America Great Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Great Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Jackson Financial and America Great

The main advantage of trading using opposite Jackson Financial and America Great positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jackson Financial position performs unexpectedly, America Great 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 America Great will offset losses from the drop in America Great's long position.

The idea behind Jackson Financial and America Great Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.