Correlation Between Prudential Government and Ubs International
Can any of the company-specific risk be diversified away by investing in both Prudential Government and Ubs International 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 Government and Ubs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Government Money and Ubs International Sustainable, you can compare the effects of market volatilities on Prudential Government and Ubs International 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 Government with a short position of Ubs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Government and Ubs International.
Diversification Opportunities for Prudential Government and Ubs International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and Ubs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Government Money and Ubs International Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs International and Prudential Government 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 Government Money are associated (or correlated) with Ubs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs International has no effect on the direction of Prudential Government i.e., Prudential Government and Ubs International go up and down completely randomly.
Pair Corralation between Prudential Government and Ubs International
Assuming the 90 days horizon Prudential Government is expected to generate 3.44 times less return on investment than Ubs International. But when comparing it to its historical volatility, Prudential Government Money is 5.12 times less risky than Ubs International. It trades about 0.1 of its potential returns per unit of risk. Ubs International Sustainable is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Ubs International Sustainable on September 12, 2024 and sell it today you would earn a total of 161.00 from holding Ubs International Sustainable or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Prudential Government Money vs. Ubs International Sustainable
Performance |
| Timeline |
| Prudential Government |
| Ubs International |
Prudential Government and Ubs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Government and Ubs International
The main advantage of trading using opposite Prudential Government and Ubs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Government position performs unexpectedly, Ubs International 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 Ubs International will offset losses from the drop in Ubs International's long position.| Prudential Government vs. Strategic Allocation Moderate | Prudential Government vs. Qs Moderate Growth | Prudential Government vs. Fidelity Managed Retirement | Prudential Government vs. Sa Worldwide Moderate |
| Ubs International vs. Matson Money Equity | Ubs International vs. Ubs Money Series | Ubs International vs. Prudential Government Money | Ubs International vs. General Money Market |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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