Correlation Between Geneva Smid and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Geneva Smid 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 Geneva Smid and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geneva Smid Cap and Prudential Jennison Equity, you can compare the effects of market volatilities on Geneva Smid 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 Geneva Smid with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geneva Smid and Prudential Jennison.
Diversification Opportunities for Geneva Smid and Prudential Jennison
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Geneva and Prudential is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Geneva Smid Cap and Prudential Jennison Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Geneva Smid 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 Geneva Smid Cap 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 Geneva Smid i.e., Geneva Smid and Prudential Jennison go up and down completely randomly.
Pair Corralation between Geneva Smid and Prudential Jennison
Assuming the 90 days horizon Geneva Smid Cap is expected to generate 1.36 times more return on investment than Prudential Jennison. However, Geneva Smid is 1.36 times more volatile than Prudential Jennison Equity. It trades about 0.05 of its potential returns per unit of risk. Prudential Jennison Equity is currently generating about 0.04 per unit of risk. If you would invest 788.00 in Geneva Smid Cap on November 30, 2024 and sell it today you would earn a total of 217.00 from holding Geneva Smid Cap or generate 27.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geneva Smid Cap vs. Prudential Jennison Equity
Performance |
| Timeline |
| Geneva Smid Cap |
| Prudential Jennison |
Geneva Smid and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geneva Smid and Prudential Jennison
The main advantage of trading using opposite Geneva Smid and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geneva Smid 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.| Geneva Smid vs. Franklin Natural Resources | Geneva Smid vs. Vanguard Energy Index | Geneva Smid vs. Franklin Natural Resources | Geneva Smid vs. Thrivent Natural Resources |
| Prudential Jennison vs. Blackrock Large Cap | Prudential Jennison vs. Lord Abbett Affiliated | Prudential Jennison vs. Fidelity Large Cap | Prudential Jennison vs. Touchstone Large Cap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |