Correlation Between Structured Products and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Structured Products 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 Structured Products and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Structured Products Corp and Prudential Financial 4125, you can compare the effects of market volatilities on Structured Products 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 Structured Products with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structured Products and Prudential Financial.
Diversification Opportunities for Structured Products and Prudential Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Structured and Prudential is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Structured Products Corp and Prudential Financial 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial 4125 and Structured Products 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 Structured Products Corp 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 4125 has no effect on the direction of Structured Products i.e., Structured Products and Prudential Financial go up and down completely randomly.
Pair Corralation between Structured Products and Prudential Financial
Considering the 90-day investment horizon Structured Products Corp is expected to generate 1.74 times more return on investment than Prudential Financial. However, Structured Products is 1.74 times more volatile than Prudential Financial 4125. It trades about 0.05 of its potential returns per unit of risk. Prudential Financial 4125 is currently generating about -0.17 per unit of risk. If you would invest 2,853 in Structured Products Corp on August 24, 2024 and sell it today you would earn a total of 41.00 from holding Structured Products Corp or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Structured Products Corp vs. Prudential Financial 4125
Performance |
| Timeline |
| Structured Products Corp |
| Prudential Financial 4125 |
Structured Products and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Structured Products and Prudential Financial
The main advantage of trading using opposite Structured Products and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Structured Products 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.| Structured Products vs. Credit Enhanced Corts | Structured Products vs. Strats Trust Cellular | Structured Products vs. Goldman Sachs Capital | Structured Products vs. STRATS SM Trust |
| Prudential Financial vs. Southern Company Series | Prudential Financial vs. Credit Enhanced Corts | Prudential Financial vs. Structured Products Corp | Prudential Financial vs. Affiliated Managers Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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