Correlation Between Barings Emerging and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Prudential Jennison 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 Barings Emerging and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Prudential Jennison Growth, you can compare the effects of market volatilities on Barings Emerging and Prudential Jennison 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 Barings Emerging with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Prudential Jennison.
Diversification Opportunities for Barings Emerging and Prudential Jennison
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Prudential is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Prudential Jennison Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Barings Emerging i.e., Barings Emerging and Prudential Jennison go up and down completely randomly.
Pair Corralation between Barings Emerging and Prudential Jennison
Assuming the 90 days horizon Barings Emerging Markets is expected to under-perform the Prudential Jennison. But the mutual fund apears to be less risky and, when comparing its historical volatility, Barings Emerging Markets is 3.81 times less risky than Prudential Jennison. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Prudential Jennison Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,086 in Prudential Jennison Growth on August 27, 2024 and sell it today you would earn a total of 226.00 from holding Prudential Jennison Growth or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Prudential Jennison Growth
Performance |
| Timeline |
| Barings Emerging Markets |
| Prudential Jennison |
Barings Emerging and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Prudential Jennison
The main advantage of trading using opposite Barings Emerging and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Barings Emerging vs. Delaware Limited Term Diversified | Barings Emerging vs. Tiaa Cref Lifestyle Conservative | Barings Emerging vs. Oaktree Diversifiedome | Barings Emerging vs. Pimco Diversified Income |
| Prudential Jennison vs. Shelton Emerging Markets | Prudential Jennison vs. Barings Emerging Markets | Prudential Jennison vs. Rbc Bluebay Emerging | Prudential Jennison vs. Eagle Mlp Strategy |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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