Correlation Between Eic Value and Prudential Health
Can any of the company-specific risk be diversified away by investing in both Eic Value and Prudential Health 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 Eic Value and Prudential Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Prudential Health Sciences, you can compare the effects of market volatilities on Eic Value and Prudential Health 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 Eic Value with a short position of Prudential Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Prudential Health.
Diversification Opportunities for Eic Value and Prudential Health
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eic and Prudential is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Prudential Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Health and Eic Value 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 Eic Value Fund are associated (or correlated) with Prudential Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Health has no effect on the direction of Eic Value i.e., Eic Value and Prudential Health go up and down completely randomly.
Pair Corralation between Eic Value and Prudential Health
Assuming the 90 days horizon Eic Value Fund is expected to generate 0.66 times more return on investment than Prudential Health. However, Eic Value Fund is 1.5 times less risky than Prudential Health. It trades about 0.13 of its potential returns per unit of risk. Prudential Health Sciences is currently generating about -0.07 per unit of risk. If you would invest 1,833 in Eic Value Fund on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Eic Value Fund or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Prudential Health Sciences
Performance |
| Timeline |
| Eic Value Fund |
| Prudential Health |
Eic Value and Prudential Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Prudential Health
The main advantage of trading using opposite Eic Value and Prudential Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Prudential Health 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 Health will offset losses from the drop in Prudential Health's long position.| Eic Value vs. Tax Managed Mid Small | Eic Value vs. Legg Mason Bw | Eic Value vs. Jhancock Diversified Macro | Eic Value vs. Davenport Small Cap |
| Prudential Health vs. Eic Value Fund | Prudential Health vs. Commodities Strategy Fund | Prudential Health vs. Vanguard Windsor Fund | Prudential Health vs. Semiconductor Ultrasector Profund |
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 Stocks Directory module to find actively traded stocks across global markets.
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