Correlation Between Emerging Markets and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Growth and Prudential Jennison International, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Prudential Jennison.
Diversification Opportunities for Emerging Markets and Prudential Jennison
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Prudential is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Growth and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Emerging Markets 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 Emerging Markets Growth 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 Emerging Markets i.e., Emerging Markets and Prudential Jennison go up and down completely randomly.
Pair Corralation between Emerging Markets and Prudential Jennison
Assuming the 90 days horizon Emerging Markets Growth is expected to generate 0.76 times more return on investment than Prudential Jennison. However, Emerging Markets Growth is 1.31 times less risky than Prudential Jennison. It trades about 0.03 of its potential returns per unit of risk. Prudential Jennison International is currently generating about 0.0 per unit of risk. If you would invest 666.00 in Emerging Markets Growth on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Emerging Markets Growth or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Growth vs. Prudential Jennison Internatio
Performance |
| Timeline |
| Emerging Markets Growth |
| Prudential Jennison |
Emerging Markets and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Prudential Jennison
The main advantage of trading using opposite Emerging Markets and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Quantitative Longshort Equity | Emerging Markets vs. Sterling Capital Short | Emerging Markets vs. Federated Ultrashort Bond | Emerging Markets vs. Franklin Federal Limited Term |
| Prudential Jennison vs. Europacific Growth Fund | Prudential Jennison vs. Europacific Growth Fund | Prudential Jennison vs. HUMANA INC | Prudential Jennison vs. Aquagold International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |