Correlation Between Prudential Emerging and Centre American
Can any of the company-specific risk be diversified away by investing in both Prudential Emerging and Centre American 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 Centre American 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 Centre American Select, you can compare the effects of market volatilities on Prudential Emerging and Centre American 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 Centre American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Emerging and Centre American.
Diversification Opportunities for Prudential Emerging and Centre American
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Centre is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Emerging Markets and Centre American Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centre American Select 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 Centre American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centre American Select has no effect on the direction of Prudential Emerging i.e., Prudential Emerging and Centre American go up and down completely randomly.
Pair Corralation between Prudential Emerging and Centre American
Assuming the 90 days horizon Prudential Emerging Markets is expected to generate 0.68 times more return on investment than Centre American. However, Prudential Emerging Markets is 1.48 times less risky than Centre American. It trades about 0.05 of its potential returns per unit of risk. Centre American Select is currently generating about -0.04 per unit of risk. If you would invest 448.00 in Prudential Emerging Markets on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Prudential Emerging Markets or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Emerging Markets vs. Centre American Select
Performance |
| Timeline |
| Prudential Emerging |
| Centre American Select |
Prudential Emerging and Centre American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Emerging and Centre American
The main advantage of trading using opposite Prudential Emerging and Centre American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Emerging position performs unexpectedly, Centre American 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 Centre American will offset losses from the drop in Centre American's long position.| Prudential Emerging vs. Barings Global Floating | Prudential Emerging vs. Ab Global Bond | Prudential Emerging vs. Ms Global Fixed | Prudential Emerging vs. Aqr Global Macro |
| Centre American vs. Goldman Sachs Short | Centre American vs. Old Westbury California | Centre American vs. Barings High Yield | Centre American vs. Ab Bond Inflation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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