Correlation Between Ab Select and Prudential High
Can any of the company-specific risk be diversified away by investing in both Ab Select and Prudential High 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 Select and Prudential High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Prudential High Yield, you can compare the effects of market volatilities on Ab Select and Prudential High 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 Select with a short position of Prudential High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Prudential High.
Diversification Opportunities for Ab Select and Prudential High
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUUYX and Prudential is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Prudential High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential High Yield and Ab Select 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 Select Equity are associated (or correlated) with Prudential High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential High Yield has no effect on the direction of Ab Select i.e., Ab Select and Prudential High go up and down completely randomly.
Pair Corralation between Ab Select and Prudential High
Assuming the 90 days horizon Ab Select is expected to generate 1.2 times less return on investment than Prudential High. In addition to that, Ab Select is 5.5 times more volatile than Prudential High Yield. It trades about 0.02 of its total potential returns per unit of risk. Prudential High Yield is currently generating about 0.15 per unit of volatility. If you would invest 468.00 in Prudential High Yield on November 2, 2024 and sell it today you would earn a total of 13.00 from holding Prudential High Yield or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Prudential High Yield
Performance |
| Timeline |
| Ab Select Equity |
| Prudential High Yield |
Ab Select and Prudential High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Prudential High
The main advantage of trading using opposite Ab Select and Prudential High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Prudential High 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 High will offset losses from the drop in Prudential High's long position.| Ab Select vs. Us Government Securities | Ab Select vs. Inverse Government Long | Ab Select vs. Aig Government Money | Ab Select vs. Great West Government Mortgage |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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