Correlation Between Prudential Jennison and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Prudential Jennison and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Floating Rate.
Diversification Opportunities for Prudential Jennison and Floating Rate
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prudential and Floating is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Floating Rate go up and down completely randomly.
Pair Corralation between Prudential Jennison and Floating Rate
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 27.65 times more return on investment than Floating Rate. However, Prudential Jennison is 27.65 times more volatile than Floating Rate Fund. It trades about 0.31 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.3 per unit of risk. If you would invest 2,486 in Prudential Jennison Financial on September 2, 2024 and sell it today you would earn a total of 267.00 from holding Prudential Jennison Financial or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Floating Rate Fund
Performance |
| Timeline |
| Prudential Jennison |
| Floating Rate |
Prudential Jennison and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Floating Rate
The main advantage of trading using opposite Prudential Jennison and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Prudential Jennison vs. Touchstone Premium Yield | Prudential Jennison vs. Versatile Bond Portfolio | Prudential Jennison vs. Blrc Sgy Mnp | Prudential Jennison vs. Artisan High Income |
| Floating Rate vs. Fidelity Advisor Financial | Floating Rate vs. Prudential Jennison Financial | Floating Rate vs. Vanguard Financials Index | Floating Rate vs. Mesirow Financial Small |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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