Correlation Between Prudential Jennison and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Global, you can compare the effects of market volatilities on Prudential Jennison and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Columbia Seligman.
Diversification Opportunities for Prudential Jennison and Columbia Seligman
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prudential and Columbia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Columbia Seligman go up and down completely randomly.
Pair Corralation between Prudential Jennison and Columbia Seligman
Assuming the 90 days horizon Prudential Jennison Financial is expected to under-perform the Columbia Seligman. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Jennison Financial is 1.41 times less risky than Columbia Seligman. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Columbia Seligman Global is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 7,613 in Columbia Seligman Global on November 28, 2024 and sell it today you would lose (137.00) from holding Columbia Seligman Global or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Columbia Seligman Global
Performance |
| Timeline |
| Prudential Jennison |
| Columbia Seligman Global |
Prudential Jennison and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Columbia Seligman
The main advantage of trading using opposite Prudential Jennison and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman's long position.| Prudential Jennison vs. Mainstay High Yield | Prudential Jennison vs. Tiaa Cref High Yield Fund | Prudential Jennison vs. Virtus High Yield | Prudential Jennison vs. Voya High Yield |
| Columbia Seligman vs. Shelton Emerging Markets | Columbia Seligman vs. Credit Suisse Multialternative | Columbia Seligman vs. Versatile Bond Portfolio | Columbia Seligman vs. Rbb Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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