Correlation Between Ab Global and Prudential Core
Can any of the company-specific risk be diversified away by investing in both Ab Global and Prudential Core 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 Global and Prudential Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Prudential Core Conservative, you can compare the effects of market volatilities on Ab Global and Prudential Core 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 Global with a short position of Prudential Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Prudential Core.
Diversification Opportunities for Ab Global and Prudential Core
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ANAYX and Prudential is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Prudential Core Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Core Cons and Ab Global 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 Global Bond are associated (or correlated) with Prudential Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Core Cons has no effect on the direction of Ab Global i.e., Ab Global and Prudential Core go up and down completely randomly.
Pair Corralation between Ab Global and Prudential Core
Assuming the 90 days horizon Ab Global Bond is expected to generate 0.72 times more return on investment than Prudential Core. However, Ab Global Bond is 1.38 times less risky than Prudential Core. It trades about 0.06 of its potential returns per unit of risk. Prudential Core Conservative is currently generating about 0.03 per unit of risk. If you would invest 640.00 in Ab Global Bond on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Ab Global Bond or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Bond vs. Prudential Core Conservative
Performance |
| Timeline |
| Ab Global Bond |
| Prudential Core Cons |
Ab Global and Prudential Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Prudential Core
The main advantage of trading using opposite Ab Global and Prudential Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Prudential Core 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 Core will offset losses from the drop in Prudential Core's long position.| Ab Global vs. Pgim High Yield | Ab Global vs. Virtus High Yield | Ab Global vs. Pioneer High Yield | Ab Global vs. American Century High |
| Prudential Core vs. Lord Abbett High | Prudential Core vs. Pioneer High Yield | Prudential Core vs. Dunham High Yield | Prudential Core vs. Guggenheim High Yield |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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