Correlation Between Prudential Jennison and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Horizon Active 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 Jennison and Horizon Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Financial and Horizon Active Asset, you can compare the effects of market volatilities on Prudential Jennison and Horizon Active 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 Jennison with a short position of Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Horizon Active.
Diversification Opportunities for Prudential Jennison and Horizon Active
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prudential and Horizon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Horizon Active Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Asset and Prudential Jennison 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 Jennison Financial are associated (or correlated) with Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Asset has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Horizon Active go up and down completely randomly.
Pair Corralation between Prudential Jennison and Horizon Active
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 1.3 times more return on investment than Horizon Active. However, Prudential Jennison is 1.3 times more volatile than Horizon Active Asset. It trades about 0.11 of its potential returns per unit of risk. Horizon Active Asset is currently generating about 0.08 per unit of risk. If you would invest 1,594 in Prudential Jennison Financial on September 14, 2024 and sell it today you would earn a total of 1,069 from holding Prudential Jennison Financial or generate 67.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Horizon Active Asset
Performance |
| Timeline |
| Prudential Jennison |
| Horizon Active Asset |
Prudential Jennison and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Horizon Active
The main advantage of trading using opposite Prudential Jennison and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Horizon Active 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| Prudential Jennison vs. Angel Oak Ultrashort | Prudential Jennison vs. Rbc Short Duration | Prudential Jennison vs. Lord Abbett Short | Prudential Jennison vs. Virtus Multi Sector Short |
| Horizon Active vs. Financials Ultrasector Profund | Horizon Active vs. Prudential Jennison Financial | Horizon Active vs. Blackrock Financial Institutions | Horizon Active vs. Vanguard Financials Index |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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