Correlation Between Inflation-protected and Prudential Government
Can any of the company-specific risk be diversified away by investing in both Inflation-protected and Prudential 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 Inflation-protected and Prudential Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Prudential Government Money, you can compare the effects of market volatilities on Inflation-protected and Prudential 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 Inflation-protected with a short position of Prudential Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Prudential Government.
Diversification Opportunities for Inflation-protected and Prudential Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inflation-protected and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Prudential Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Government and Inflation-protected 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 Inflation Protected Bond Fund are associated (or correlated) with Prudential Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Government has no effect on the direction of Inflation-protected i.e., Inflation-protected and Prudential Government go up and down completely randomly.
Pair Corralation between Inflation-protected and Prudential Government
If you would invest 1,030 in Inflation Protected Bond Fund on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Inflation Protected Bond Fund or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Prudential Government Money
Performance |
| Timeline |
| Inflation Protected |
| Prudential Government |
Inflation-protected and Prudential Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Prudential Government
The main advantage of trading using opposite Inflation-protected and Prudential Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected position performs unexpectedly, Prudential 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 Prudential Government will offset losses from the drop in Prudential Government's long position.| Inflation-protected vs. Putnman Retirement Ready | Inflation-protected vs. Hartford Moderate Allocation | Inflation-protected vs. Jp Morgan Smartretirement | Inflation-protected vs. American Funds Retirement |
| Prudential Government vs. Lord Abbett Small | Prudential Government vs. Fidelity Small Cap | Prudential Government vs. Queens Road Small | Prudential Government vs. Small Cap Value |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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