Correlation Between Jackson Financial and Whitehaven Coal

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

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

Diversification Opportunities for Jackson Financial and Whitehaven Coal

0.55

Correlation Coefficient

Jackson Financial  Whitehaven Coal

Very weak diversification

The 3 months correlation between Jackson and Whitehaven is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Whitehaven Coal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal 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 Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Jackson Financial i.e., Jackson Financial and Whitehaven Coal go up and down completely randomly.

Pair Corralation between Jackson Financial and Whitehaven Coal

Assuming the 90 days trading horizon Jackson Financial is expected to generate 0.39 times more return on investment than Whitehaven Coal. However, Jackson Financial is 2.53 times less risky than Whitehaven Coal. It trades about 0.05 of its potential returns per unit of risk. Whitehaven Coal Limited is currently generating about 0.0 per unit of risk. If you would invest  2,208  in Jackson Financial on September 5, 2024 and sell it today you would earn a total of  527.00  from holding Jackson Financial or generate 23.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.29%
Values	Daily Returns

Jackson Financial  vs.  Whitehaven Coal Limited

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.

Whitehaven Coal

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Whitehaven Coal Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Whitehaven Coal is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jackson Financial and Whitehaven Coal

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

The idea behind Jackson Financial and Whitehaven Coal Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.