Correlation Between Huber Capital and Prudential Floating
Can any of the company-specific risk be diversified away by investing in both Huber Capital and Prudential Floating 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 Huber Capital and Prudential Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Diversified and Prudential Floating Rate, you can compare the effects of market volatilities on Huber Capital and Prudential Floating 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 Huber Capital with a short position of Prudential Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Prudential Floating.
Diversification Opportunities for Huber Capital and Prudential Floating
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huber and Prudential is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Prudential Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Floating Rate and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with Prudential Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Floating Rate has no effect on the direction of Huber Capital i.e., Huber Capital and Prudential Floating go up and down completely randomly.
Pair Corralation between Huber Capital and Prudential Floating
Assuming the 90 days horizon Huber Capital Diversified is expected to generate 11.81 times more return on investment than Prudential Floating. However, Huber Capital is 11.81 times more volatile than Prudential Floating Rate. It trades about 0.04 of its potential returns per unit of risk. Prudential Floating Rate is currently generating about 0.08 per unit of risk. If you would invest 2,498 in Huber Capital Diversified on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Huber Capital Diversified or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huber Capital Diversified vs. Prudential Floating Rate
Performance |
| Timeline |
| Huber Capital Diversified |
| Prudential Floating Rate |
Huber Capital and Prudential Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and Prudential Floating
The main advantage of trading using opposite Huber Capital and Prudential Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital position performs unexpectedly, Prudential Floating 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 Floating will offset losses from the drop in Prudential Floating's long position.| Huber Capital vs. Ppm High Yield | Huber Capital vs. Calvert High Yield | Huber Capital vs. Western Asset High | Huber Capital vs. Siit High Yield |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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