Correlation Between Prudential Jennison and Franklin Ohio
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Franklin Ohio 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 Franklin Ohio 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 Franklin Ohio Tax Free, you can compare the effects of market volatilities on Prudential Jennison and Franklin Ohio 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 Franklin Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Franklin Ohio.
Diversification Opportunities for Prudential Jennison and Franklin Ohio
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Franklin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Franklin Ohio Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ohio Tax 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 Franklin Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ohio Tax has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Franklin Ohio go up and down completely randomly.
Pair Corralation between Prudential Jennison and Franklin Ohio
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 4.84 times more return on investment than Franklin Ohio. However, Prudential Jennison is 4.84 times more volatile than Franklin Ohio Tax Free. It trades about 0.16 of its potential returns per unit of risk. Franklin Ohio Tax Free is currently generating about 0.1 per unit of risk. If you would invest 1,843 in Prudential Jennison Financial on September 4, 2024 and sell it today you would earn a total of 865.00 from holding Prudential Jennison Financial or generate 46.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Franklin Ohio Tax Free
Performance |
| Timeline |
| Prudential Jennison |
| Franklin Ohio Tax |
Prudential Jennison and Franklin Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Franklin Ohio
The main advantage of trading using opposite Prudential Jennison and Franklin Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Franklin Ohio 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 Franklin Ohio will offset losses from the drop in Franklin Ohio's long position.| Prudential Jennison vs. Allianzgi Health Sciences | Prudential Jennison vs. Prudential Health Sciences | Prudential Jennison vs. Invesco Global Health | Prudential Jennison vs. Alphacentric Lifesci Healthcare |
| Franklin Ohio vs. Calvert Global Energy | Franklin Ohio vs. Oil Gas Ultrasector | Franklin Ohio vs. Gmo Resources | Franklin Ohio vs. Gamco Natural Resources |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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