Correlation Between Prudential High and Barings Us
Can any of the company-specific risk be diversified away by investing in both Prudential High and Barings Us 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 Prudential High and Barings Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Barings High Yield, you can compare the effects of market volatilities on Prudential High and Barings Us 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 Prudential High with a short position of Barings Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Barings Us.
Diversification Opportunities for Prudential High and Barings Us
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Barings is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Barings High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings High Yield and Prudential High 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 Prudential High Yield are associated (or correlated) with Barings Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings High Yield has no effect on the direction of Prudential High i.e., Prudential High and Barings Us go up and down completely randomly.
Pair Corralation between Prudential High and Barings Us
Assuming the 90 days horizon Prudential High Yield is expected to generate 1.17 times more return on investment than Barings Us. However, Prudential High is 1.17 times more volatile than Barings High Yield. It trades about 0.31 of its potential returns per unit of risk. Barings High Yield is currently generating about 0.28 per unit of risk. If you would invest 474.00 in Prudential High Yield on October 23, 2024 and sell it today you would earn a total of 6.00 from holding Prudential High Yield or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Barings High Yield
Performance |
| Timeline |
| Prudential High Yield |
| Barings High Yield |
Prudential High and Barings Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Barings Us
The main advantage of trading using opposite Prudential High and Barings Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Barings Us 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 Barings Us will offset losses from the drop in Barings Us' long position.| Prudential High vs. Tiaa Cref Lifestyle Conservative | Prudential High vs. Voya Solution Conservative | Prudential High vs. Lord Abbett Diversified | Prudential High vs. Jhancock Diversified Macro |
| Barings Us vs. Dreyfus High Yield | Barings Us vs. Blackrock High Yield | Barings Us vs. Jpmorgan High Yield | Barings Us vs. Federated High Yield |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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