Correlation Between Credit Acceptance and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance and Prudential Financial 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 Credit Acceptance and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and Prudential Financial, you can compare the effects of market volatilities on Credit Acceptance and Prudential Financial 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 Credit Acceptance with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Prudential Financial.
Diversification Opportunities for Credit Acceptance and Prudential Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Credit and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance and Prudential Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial and Credit Acceptance 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 Credit Acceptance are associated (or correlated) with Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Credit Acceptance i.e., Credit Acceptance and Prudential Financial go up and down completely randomly.
Pair Corralation between Credit Acceptance and Prudential Financial
If you would invest 32,340 in Prudential Financial on August 24, 2024 and sell it today you would earn a total of 3,789 from holding Prudential Financial or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Credit Acceptance vs. Prudential Financial
Performance |
| Timeline |
| Credit Acceptance |
| Prudential Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Credit Acceptance and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Prudential Financial
The main advantage of trading using opposite Credit Acceptance and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance position performs unexpectedly, Prudential Financial 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 Financial will offset losses from the drop in Prudential Financial's long position.| Credit Acceptance vs. Marvell Technology | Credit Acceptance vs. Take Two Interactive Software | Credit Acceptance vs. Uber Technologies | Credit Acceptance vs. Paycom Software |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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