Correlation Between Prudential Government and Western Asset
Can any of the company-specific risk be diversified away by investing in both Prudential Government and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Prudential Government and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Government and Western Asset.
Diversification Opportunities for Prudential Government and Western Asset
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Government Money and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Prudential Government i.e., Prudential Government and Western Asset go up and down completely randomly.
Pair Corralation between Prudential Government and Western Asset
If you would invest 1,036 in Western Asset E on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset E or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Government Money vs. Western Asset E
Performance |
| Timeline |
| Prudential Government |
| Western Asset E |
Prudential Government and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Government and Western Asset
The main advantage of trading using opposite Prudential Government and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Government position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Prudential Government vs. Metropolitan West Porate | Prudential Government vs. Doubleline Total Return | Prudential Government vs. Enhanced Fixed Income | Prudential Government vs. Morningstar Defensive Bond |
| Western Asset vs. Ubs Money Series | Western Asset vs. Schwab Government Money | Western Asset vs. Pioneer Money Market | Western Asset vs. Prudential Government Money |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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