Correlation Between Prudential High and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both Prudential High and Stringer Growth 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 Stringer Growth 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 Stringer Growth Fund, you can compare the effects of market volatilities on Prudential High and Stringer Growth 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 Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Stringer Growth.
Diversification Opportunities for Prudential High and Stringer Growth
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prudential and Stringer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth 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 Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Prudential High i.e., Prudential High and Stringer Growth go up and down completely randomly.
Pair Corralation between Prudential High and Stringer Growth
Assuming the 90 days horizon Prudential High Yield is expected to generate 0.31 times more return on investment than Stringer Growth. However, Prudential High Yield is 3.21 times less risky than Stringer Growth. It trades about 0.15 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.04 per unit of risk. If you would invest 468.00 in Prudential High Yield on November 2, 2024 and sell it today you would earn a total of 13.00 from holding Prudential High Yield or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Stringer Growth Fund
Performance |
| Timeline |
| Prudential High Yield |
| Stringer Growth |
Prudential High and Stringer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Stringer Growth
The main advantage of trading using opposite Prudential High and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth's long position.| Prudential High vs. Fisher Large Cap | Prudential High vs. Hartford Moderate Allocation | Prudential High vs. Alternative Asset Allocation | Prudential High vs. Balanced Allocation Fund |
| Stringer Growth vs. Wisdomtree Siegel Global | Stringer Growth vs. Ab Global Bond | Stringer Growth vs. Rbc Global Equity | Stringer Growth vs. Alliancebernstein Global Highome |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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