Correlation Between Prudential Short and Fisher Large
Can any of the company-specific risk be diversified away by investing in both Prudential Short and Fisher Large 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 Short and Fisher Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Short Duration and Fisher Large Cap, you can compare the effects of market volatilities on Prudential Short and Fisher Large 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 Short with a short position of Fisher Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Short and Fisher Large.
Diversification Opportunities for Prudential Short and Fisher Large
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Fisher is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Short Duration and Fisher Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Large Cap and Prudential Short 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 Short Duration are associated (or correlated) with Fisher Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Large Cap has no effect on the direction of Prudential Short i.e., Prudential Short and Fisher Large go up and down completely randomly.
Pair Corralation between Prudential Short and Fisher Large
Assuming the 90 days horizon Prudential Short is expected to generate 2.63 times less return on investment than Fisher Large. But when comparing it to its historical volatility, Prudential Short Duration is 6.03 times less risky than Fisher Large. It trades about 0.19 of its potential returns per unit of risk. Fisher Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,692 in Fisher Large Cap on October 26, 2024 and sell it today you would earn a total of 176.00 from holding Fisher Large Cap or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Short Duration vs. Fisher Large Cap
Performance |
| Timeline |
| Prudential Short Duration |
| Fisher Large Cap |
Prudential Short and Fisher Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Short and Fisher Large
The main advantage of trading using opposite Prudential Short and Fisher Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Short position performs unexpectedly, Fisher Large 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 Fisher Large will offset losses from the drop in Fisher Large's long position.| Prudential Short vs. Avantis Short Term Fixed | Prudential Short vs. Virtus Multi Sector Short | Prudential Short vs. Calvert Short Duration | Prudential Short vs. Cmg Ultra Short |
| Fisher Large vs. Vela Short Duration | Fisher Large vs. Prudential Short Duration | Fisher Large vs. Jhancock Short Duration | Fisher Large vs. Siit Ultra Short |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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