Correlation Between Mfs International and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Mfs International and Prudential Jennison 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 Mfs International and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Diversification and Prudential Jennison International, you can compare the effects of market volatilities on Mfs International and Prudential Jennison 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 Mfs International with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Prudential Jennison.
Diversification Opportunities for Mfs International and Prudential Jennison
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Prudential is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Mfs International 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 Mfs International Diversification are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Mfs International i.e., Mfs International and Prudential Jennison go up and down completely randomly.
Pair Corralation between Mfs International and Prudential Jennison
Assuming the 90 days horizon Mfs International is expected to generate 1.1 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, Mfs International Diversification is 1.43 times less risky than Prudential Jennison. It trades about 0.05 of its potential returns per unit of risk. Prudential Jennison International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,781 in Prudential Jennison International on September 2, 2024 and sell it today you would earn a total of 335.00 from holding Prudential Jennison International or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Diversificat vs. Prudential Jennison Internatio
Performance |
| Timeline |
| Mfs International |
| Prudential Jennison |
Mfs International and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Prudential Jennison
The main advantage of trading using opposite Mfs International and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Mfs International vs. Franklin Dynatech Fund | Mfs International vs. John Hancock Bond | Mfs International vs. Prudential Total Return | Mfs International vs. Jpmorgan Equity Income |
| Prudential Jennison vs. Aam Select Income | Prudential Jennison vs. Qs Large Cap | Prudential Jennison vs. Western Asset Municipal | Prudential Jennison vs. Bbh Partner Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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