Correlation Between Alior Bank and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Prudential Financial 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 Alior Bank and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and Prudential Financial, you can compare the effects of market volatilities on Alior Bank and Prudential Financial 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 Alior Bank with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Prudential Financial.
Diversification Opportunities for Alior Bank and Prudential Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alior and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Prudential Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial and Alior Bank 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 Alior Bank SA are associated (or correlated) with Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Alior Bank i.e., Alior Bank and Prudential Financial go up and down completely randomly.
Pair Corralation between Alior Bank and Prudential Financial
If you would invest 12,192 in Prudential Financial on August 26, 2024 and sell it today you would earn a total of 642.00 from holding Prudential Financial or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Prudential Financial
Performance |
| Timeline |
| Alior Bank SA |
| Prudential Financial |
Alior Bank and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Prudential Financial
The main advantage of trading using opposite Alior Bank and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Prudential Financial 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 Prudential Financial will offset losses from the drop in Prudential Financial's long position.| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. SoftBank Group Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Yum Brands |
| Prudential Financial vs. Cars Inc | Prudential Financial vs. JD Sports Fashion | Prudential Financial vs. United States Steel | Prudential Financial vs. PPHE Hotel Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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