Correlation Between GP Investments and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both GP Investments and Prudential Financial 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 GP Investments and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Prudential Financial, you can compare the effects of market volatilities on GP Investments and Prudential Financial 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 GP Investments with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Prudential Financial.
Diversification Opportunities for GP Investments and Prudential Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and Prudential is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Prudential Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial and GP Investments 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 GP Investments are associated (or correlated) with Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of GP Investments i.e., GP Investments and Prudential Financial go up and down completely randomly.
Pair Corralation between GP Investments and Prudential Financial
Assuming the 90 days trading horizon GP Investments is expected to under-perform the Prudential Financial. In addition to that, GP Investments is 2.06 times more volatile than Prudential Financial. It trades about -0.16 of its total potential returns per unit of risk. Prudential Financial is currently generating about 0.2 per unit of volatility. If you would invest 32,340 in Prudential Financial on August 31, 2024 and sell it today you would earn a total of 4,956 from holding Prudential Financial or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. Prudential Financial
Performance |
| Timeline |
| GP Investments |
| Prudential Financial |
GP Investments and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Prudential Financial
The main advantage of trading using opposite GP Investments and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Prudential Financial 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 Financial will offset losses from the drop in Prudential Financial's long position.| GP Investments vs. The Bank of | GP Investments vs. Ameriprise Financial | GP Investments vs. Banco BTG Pactual | GP Investments vs. Banco BTG Pactual |
| Prudential Financial vs. Fras le SA | Prudential Financial vs. Western Digital | Prudential Financial vs. Energisa SA | Prudential Financial vs. Clave Indices De |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |