Correlation Between Jackson Financial and Globe Life

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

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

Diversification Opportunities for Jackson Financial and Globe Life

-0.65

Correlation Coefficient

Jackson Financial  Globe Life

Excellent diversification

The 3 months correlation between Jackson and Globe is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jackson Financial and Globe Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Life 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 Globe Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Life has no effect on the direction of Jackson Financial i.e., Jackson Financial and Globe Life go up and down completely randomly.

Pair Corralation between Jackson Financial and Globe Life

Considering the 90-day investment horizon Jackson Financial is expected to generate 0.13 times more return on investment than Globe Life. However, Jackson Financial is 7.57 times less risky than Globe Life. It trades about 0.09 of its potential returns per unit of risk. Globe Life is currently generating about -0.05 per unit of risk. If you would invest  6,615  in Jackson Financial on January 31, 2024 and sell it today you would earn a total of  217.00  from holding Jackson Financial or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jackson Financial  vs.  Globe Life

Jackson Financial

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jackson Financial are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jackson Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Globe Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globe Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Jackson Financial and Globe Life

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

The idea behind Jackson Financial and Globe Life 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.