Correlation Between Great-west Loomis and Prudential Utility
Can any of the company-specific risk be diversified away by investing in both Great-west Loomis and Prudential Utility 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 Great-west Loomis and Prudential Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Prudential Utility Fund, you can compare the effects of market volatilities on Great-west Loomis and Prudential Utility 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 Great-west Loomis with a short position of Prudential Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Loomis and Prudential Utility.
Diversification Opportunities for Great-west Loomis and Prudential Utility
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great-west and Prudential is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Prudential Utility Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Utility and Great-west Loomis 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 Great West Loomis Sayles are associated (or correlated) with Prudential Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Utility has no effect on the direction of Great-west Loomis i.e., Great-west Loomis and Prudential Utility go up and down completely randomly.
Pair Corralation between Great-west Loomis and Prudential Utility
Assuming the 90 days horizon Great-west Loomis is expected to generate 1.43 times less return on investment than Prudential Utility. In addition to that, Great-west Loomis is 1.39 times more volatile than Prudential Utility Fund. It trades about 0.08 of its total potential returns per unit of risk. Prudential Utility Fund is currently generating about 0.15 per unit of volatility. If you would invest 1,460 in Prudential Utility Fund on September 1, 2024 and sell it today you would earn a total of 280.00 from holding Prudential Utility Fund or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Prudential Utility Fund
Performance |
| Timeline |
| Great West Loomis |
| Prudential Utility |
Great-west Loomis and Prudential Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Loomis and Prudential Utility
The main advantage of trading using opposite Great-west Loomis and Prudential Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Loomis position performs unexpectedly, Prudential Utility 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 Utility will offset losses from the drop in Prudential Utility's long position.| Great-west Loomis vs. Gabelli Gold Fund | Great-west Loomis vs. Global Gold Fund | Great-west Loomis vs. Invesco Gold Special | Great-west Loomis vs. International Investors Gold |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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