Correlation Between Prudential Jennison and Ab Select
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Ab Select 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 Select 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 Select Equity, you can compare the effects of market volatilities on Prudential Jennison and Ab Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Ab Select.
Diversification Opportunities for Prudential Jennison and Ab Select
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and AUUIX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Ab Select go up and down completely randomly.
Pair Corralation between Prudential Jennison and Ab Select
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 2.01 times more return on investment than Ab Select. However, Prudential Jennison is 2.01 times more volatile than Ab Select Equity. It trades about 0.24 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.21 per unit of risk. If you would invest 2,528 in Prudential Jennison Financial on August 29, 2024 and sell it today you would earn a total of 226.00 from holding Prudential Jennison Financial or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Ab Select Equity
Performance |
| Timeline |
| Prudential Jennison |
| Ab Select Equity |
Prudential Jennison and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Ab Select
The main advantage of trading using opposite Prudential Jennison and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Ab Select 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 Select will offset losses from the drop in Ab Select's long position.| Prudential Jennison vs. Vanguard Financials Index | Prudential Jennison vs. T Rowe Price | Prudential Jennison vs. Davis Financial Fund | Prudential Jennison vs. HUMANA INC |
| Ab Select vs. Financials Ultrasector Profund | Ab Select vs. Icon Financial Fund | Ab Select vs. Davis Financial Fund | Ab Select 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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