Correlation Between Jackson Financial and UGI Corp

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

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

Diversification Opportunities for Jackson Financial and UGI Corp

-0.86

Correlation Coefficient

Jackson Financial  UGI Corp

Pay attention - limited upside

The 3 months correlation between Jackson and UGI is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and UGI Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corp Unit 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 UGI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corp Unit has no effect on the direction of Jackson Financial i.e., Jackson Financial and UGI Corp go up and down completely randomly.

Pair Corralation between Jackson Financial and UGI Corp

If you would invest  2,374  in Jackson Financial on September 4, 2024 and sell it today you would earn a total of  361.00  from holding Jackson Financial or generate 15.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

Jackson Financial  vs.  UGI Corp Unit

Jackson Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jackson Financial are ranked lower than 11 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

UGI Corp Unit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UGI Corp Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, UGI Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jackson Financial and UGI Corp

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

The idea behind Jackson Financial and UGI Corp Unit 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.