Correlation Between Prudential Short and Aig Government
Can any of the company-specific risk be diversified away by investing in both Prudential Short and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Prudential Short and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Short and Aig Government.
Diversification Opportunities for Prudential Short and Aig Government
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Aig is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Short Duration and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Prudential Short i.e., Prudential Short and Aig Government go up and down completely randomly.
Pair Corralation between Prudential Short and Aig Government
Assuming the 90 days horizon Prudential Short Duration is expected to generate 0.87 times more return on investment than Aig Government. However, Prudential Short Duration is 1.15 times less risky than Aig Government. It trades about 0.23 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.11 per unit of risk. If you would invest 838.00 in Prudential Short Duration on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Prudential Short Duration or generate 0.72% 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. Aig Government Money
Performance |
| Timeline |
| Prudential Short Duration |
| Aig Government Money |
Prudential Short and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Short and Aig Government
The main advantage of trading using opposite Prudential Short and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Short position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Prudential Short vs. Diversified Income Fund | Prudential Short vs. Voya Solution Conservative | Prudential Short vs. Lord Abbett Diversified | Prudential Short vs. Delaware Limited Term Diversified |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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