Correlation Between Prudential Jennison and The Hartford
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and The Hartford 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 The Hartford 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 The Hartford Small, you can compare the effects of market volatilities on Prudential Jennison and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and The Hartford.
Diversification Opportunities for Prudential Jennison and The Hartford
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and The is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and The Hartford go up and down completely randomly.
Pair Corralation between Prudential Jennison and The Hartford
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 0.82 times more return on investment than The Hartford. However, Prudential Jennison Financial is 1.22 times less risky than The Hartford. It trades about 0.17 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.09 per unit of risk. If you would invest 1,836 in Prudential Jennison Financial on September 3, 2024 and sell it today you would earn a total of 917.00 from holding Prudential Jennison Financial or generate 49.95% 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. The Hartford Small
Performance |
| Timeline |
| Prudential Jennison |
| Hartford Small |
Prudential Jennison and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and The Hartford
The main advantage of trading using opposite Prudential Jennison and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Prudential Jennison vs. Gmo High Yield | Prudential Jennison vs. Alpine High Yield | Prudential Jennison vs. Ppm High Yield | Prudential Jennison vs. Pace High Yield |
| The Hartford vs. Gabelli Global Financial | The Hartford vs. Prudential Financial Services | The Hartford vs. Financials Ultrasector Profund | The Hartford 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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