Correlation Between American Mutual and Prudential Global
Can any of the company-specific risk be diversified away by investing in both American Mutual and Prudential Global 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 American Mutual and Prudential Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Prudential Global Total, you can compare the effects of market volatilities on American Mutual and Prudential Global 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 American Mutual with a short position of Prudential Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Prudential Global.
Diversification Opportunities for American Mutual and Prudential Global
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Prudential is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Prudential Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Global Total and American Mutual 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 American Mutual Fund are associated (or correlated) with Prudential Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Global Total has no effect on the direction of American Mutual i.e., American Mutual and Prudential Global go up and down completely randomly.
Pair Corralation between American Mutual and Prudential Global
Assuming the 90 days horizon American Mutual Fund is expected to under-perform the Prudential Global. In addition to that, American Mutual is 1.34 times more volatile than Prudential Global Total. It trades about -0.07 of its total potential returns per unit of risk. Prudential Global Total is currently generating about 0.11 per unit of volatility. If you would invest 519.00 in Prudential Global Total on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Prudential Global Total or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Prudential Global Total
Performance |
| Timeline |
| American Mutual |
| Prudential Global Total |
American Mutual and Prudential Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Prudential Global
The main advantage of trading using opposite American Mutual and Prudential Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Prudential Global 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 Global will offset losses from the drop in Prudential Global's long position.| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual vs. Aquagold International |
| Prudential Global vs. Dana Large Cap | Prudential Global vs. Touchstone Large Cap | Prudential Global vs. Virtus Nfj Large Cap | Prudential Global vs. Dodge Cox Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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