Correlation Between Prudential Jennison and Aqr International
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Aqr 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 Jennison and Aqr International 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 Aqr International Momentum, you can compare the effects of market volatilities on Prudential Jennison and Aqr 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 Jennison with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Aqr International.
Diversification Opportunities for Prudential Jennison and Aqr International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Aqr is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Aqr International Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Aqr International go up and down completely randomly.
Pair Corralation between Prudential Jennison and Aqr International
Assuming the 90 days horizon Prudential Jennison Financial is expected to under-perform the Aqr International. In addition to that, Prudential Jennison is 1.27 times more volatile than Aqr International Momentum. It trades about 0.0 of its total potential returns per unit of risk. Aqr International Momentum is currently generating about 0.16 per unit of volatility. If you would invest 1,760 in Aqr International Momentum on September 13, 2024 and sell it today you would earn a total of 36.00 from holding Aqr International Momentum or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Aqr International Momentum
Performance |
| Timeline |
| Prudential Jennison |
| Aqr International |
Prudential Jennison and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Aqr International
The main advantage of trading using opposite Prudential Jennison and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Aqr 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 Aqr International will offset losses from the drop in Aqr International's long position.| Prudential Jennison vs. Gabelli Convertible And | Prudential Jennison vs. Absolute Convertible Arbitrage | Prudential Jennison vs. Advent Claymore Convertible | Prudential Jennison vs. Virtus Convertible |
| Aqr International vs. 1919 Financial Services | Aqr International vs. Prudential Jennison Financial | Aqr International vs. Gabelli Global Financial | Aqr International vs. Mesirow Financial Small |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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