Correlation Between Prudential Emerging and Prudential Intl
Can any of the company-specific risk be diversified away by investing in both Prudential Emerging and Prudential Intl 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 Prudential Emerging and Prudential Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Emerging Markets and Prudential Intl Bond, you can compare the effects of market volatilities on Prudential Emerging and Prudential Intl 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 Prudential Emerging with a short position of Prudential Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Emerging and Prudential Intl.
Diversification Opportunities for Prudential Emerging and Prudential Intl
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Prudential is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Emerging Markets and Prudential Intl Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Intl Bond and Prudential 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 Prudential Emerging Markets are associated (or correlated) with Prudential Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Intl Bond has no effect on the direction of Prudential Emerging i.e., Prudential Emerging and Prudential Intl go up and down completely randomly.
Pair Corralation between Prudential Emerging and Prudential Intl
If you would invest 453.00 in Prudential Emerging Markets on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Prudential Emerging Markets or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Prudential Emerging Markets vs. Prudential Intl Bond
Performance |
| Timeline |
| Prudential Emerging |
| Prudential Intl Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Prudential Emerging and Prudential Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Emerging and Prudential Intl
The main advantage of trading using opposite Prudential Emerging and Prudential Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Emerging position performs unexpectedly, Prudential Intl 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 Intl will offset losses from the drop in Prudential Intl's long position.| Prudential Emerging vs. Pimco Emerging Local | Prudential Emerging vs. HUMANA INC | Prudential Emerging vs. Aquagold International | Prudential Emerging vs. Barloworld Ltd ADR |
| Prudential Intl vs. T Rowe Price | Prudential Intl vs. T Rowe Price | Prudential Intl vs. Rational Defensive Growth | Prudential Intl vs. Legg Mason Partners |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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