Correlation Between Prudential Jennison and Ab Global
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Ab Global 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 Ab Global 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 Ab Global Bond, you can compare the effects of market volatilities on Prudential Jennison and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Ab Global.
Diversification Opportunities for Prudential Jennison and Ab Global
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and ANAYX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Ab Global go up and down completely randomly.
Pair Corralation between Prudential Jennison and Ab Global
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 6.86 times more return on investment than Ab Global. However, Prudential Jennison is 6.86 times more volatile than Ab Global Bond. It trades about 0.21 of its potential returns per unit of risk. Ab Global Bond is currently generating about 0.11 per unit of risk. If you would invest 2,528 in Prudential Jennison Financial on August 28, 2024 and sell it today you would earn a total of 186.00 from holding Prudential Jennison Financial or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Ab Global Bond
Performance |
| Timeline |
| Prudential Jennison |
| Ab Global Bond |
Prudential Jennison and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Ab Global
The main advantage of trading using opposite Prudential Jennison and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Prudential Jennison vs. Ab Global Risk | Prudential Jennison vs. Scharf Global Opportunity | Prudential Jennison vs. Ab Global Bond | Prudential Jennison vs. Ms Global Fixed |
| Ab Global vs. Icon Financial Fund | Ab Global vs. Davis Financial Fund | Ab Global vs. Royce Global Financial | Ab Global vs. Prudential Jennison Financial |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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