Correlation Between Ab Impact and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Prudential Short 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 Ab Impact and Prudential Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Prudential Short Duration, you can compare the effects of market volatilities on Ab Impact and Prudential Short 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 Ab Impact with a short position of Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Prudential Short.
Diversification Opportunities for Ab Impact and Prudential Short
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABIMX and Prudential is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Ab Impact i.e., Ab Impact and Prudential Short go up and down completely randomly.
Pair Corralation between Ab Impact and Prudential Short
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 2.25 times more return on investment than Prudential Short. However, Ab Impact is 2.25 times more volatile than Prudential Short Duration. It trades about 0.44 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.15 per unit of risk. If you would invest 985.00 in Ab Impact Municipal on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Ab Impact Municipal or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Impact Municipal vs. Prudential Short Duration
Performance |
| Timeline |
| Ab Impact Municipal |
| Prudential Short Duration |
Ab Impact and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Prudential Short
The main advantage of trading using opposite Ab Impact and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Prudential Short 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 Short will offset losses from the drop in Prudential Short's long position.| Ab Impact vs. SCOR PK | Ab Impact vs. Morningstar Unconstrained Allocation | Ab Impact vs. Thrivent High Yield | Ab Impact vs. Via Renewables |
| Prudential Short vs. Boston Partners Small | Prudential Short vs. Victory Rs Partners | Prudential Short vs. Omni Small Cap Value | Prudential Short vs. Pace Smallmedium Value |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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