Correlation Between Oakley Capital and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Prudential Financial, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Prudential Financial.
Diversification Opportunities for Oakley Capital and Prudential Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakley and Prudential is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Prudential Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial and Oakley Capital 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 Oakley Capital Investments 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 has no effect on the direction of Oakley Capital i.e., Oakley Capital and Prudential Financial go up and down completely randomly.
Pair Corralation between Oakley Capital and Prudential Financial
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.34 times more return on investment than Prudential Financial. However, Oakley Capital Investments is 2.97 times less risky than Prudential Financial. It trades about -0.06 of its potential returns per unit of risk. Prudential Financial is currently generating about -0.07 per unit of risk. If you would invest 47,566 in Oakley Capital Investments on December 31, 2024 and sell it today you would lose (466.00) from holding Oakley Capital Investments or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakley Capital Investments vs. Prudential Financial
Performance |
| Timeline |
| Oakley Capital Inves |
| Prudential Financial |
Oakley Capital and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Prudential Financial
The main advantage of trading using opposite Oakley Capital and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Sunny Optical Technology | Oakley Capital vs. Pfeiffer Vacuum Technology | Oakley Capital vs. Nordic Semiconductor ASA | Oakley Capital vs. Vitec Software Group |
| Prudential Financial vs. Critical Metals Plc | Prudential Financial vs. GreenX Metals | Prudential Financial vs. Rheinmetall AG | Prudential Financial vs. Endeavour Mining Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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