Correlation Between Prudential Financial and OneSavings Bank
Can any of the company-specific risk be diversified away by investing in both Prudential Financial and OneSavings Bank 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 Prudential Financial and OneSavings Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and OneSavings Bank PLC, you can compare the effects of market volatilities on Prudential Financial and OneSavings Bank 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 Prudential Financial with a short position of OneSavings Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and OneSavings Bank.
Diversification Opportunities for Prudential Financial and OneSavings Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prudential and OneSavings is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC and Prudential 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 Prudential Financial are associated (or correlated) with OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Prudential Financial i.e., Prudential Financial and OneSavings Bank go up and down completely randomly.
Pair Corralation between Prudential Financial and OneSavings Bank
Assuming the 90 days trading horizon Prudential Financial is expected to generate 0.52 times more return on investment than OneSavings Bank. However, Prudential Financial is 1.93 times less risky than OneSavings Bank. It trades about 0.09 of its potential returns per unit of risk. OneSavings Bank PLC is currently generating about 0.0 per unit of risk. If you would invest 7,871 in Prudential Financial on September 2, 2024 and sell it today you would earn a total of 5,086 from holding Prudential Financial or generate 64.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Prudential Financial vs. OneSavings Bank PLC
Performance |
| Timeline |
| Prudential Financial |
| OneSavings Bank PLC |
Prudential Financial and OneSavings Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and OneSavings Bank
The main advantage of trading using opposite Prudential Financial and OneSavings Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial position performs unexpectedly, OneSavings Bank 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 OneSavings Bank will offset losses from the drop in OneSavings Bank's long position.| Prudential Financial vs. Uniper SE | Prudential Financial vs. Mulberry Group PLC | Prudential Financial vs. London Security Plc | Prudential Financial vs. Triad Group PLC |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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