Correlation Between Panther Metals and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Panther Metals 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 Panther Metals and Prudential Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panther Metals PLC and Prudential Financial, you can compare the effects of market volatilities on Panther Metals 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 Panther Metals with a short position of Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Prudential Financial.
Diversification Opportunities for Panther Metals and Prudential Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panther and Prudential is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Prudential Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial and Panther Metals 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 Panther Metals PLC 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 Panther Metals i.e., Panther Metals and Prudential Financial go up and down completely randomly.
Pair Corralation between Panther Metals and Prudential Financial
Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 38.93 times more return on investment than Prudential Financial. However, Panther Metals is 38.93 times more volatile 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 7,625 in Panther Metals PLC on October 13, 2024 and sell it today you would earn a total of 1,125 from holding Panther Metals PLC or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.34% |
| Values | Daily Returns |
Panther Metals PLC vs. Prudential Financial
Performance |
| Timeline |
| Panther Metals PLC |
| Prudential Financial |
Panther Metals and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panther Metals and Prudential Financial
The main advantage of trading using opposite Panther Metals and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals 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.| Panther Metals vs. Xeros Technology Group | Panther Metals vs. Electronic Arts | Panther Metals vs. Learning Technologies Group | Panther Metals vs. JB Hunt Transport |
| Prudential Financial vs. Oakley Capital Investments | Prudential Financial vs. Panther Metals PLC | Prudential Financial vs. Tavistock Investments Plc | Prudential Financial vs. Cizzle Biotechnology Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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