Correlation Between Prudential Jennison and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Pear Tree 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 Pear Tree 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 Pear Tree Polaris, you can compare the effects of market volatilities on Prudential Jennison and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Pear Tree.
Diversification Opportunities for Prudential Jennison and Pear Tree
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and Pear is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Pear Tree go up and down completely randomly.
Pair Corralation between Prudential Jennison and Pear Tree
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 1.13 times more return on investment than Pear Tree. However, Prudential Jennison is 1.13 times more volatile than Pear Tree Polaris. It trades about 0.13 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.03 per unit of risk. If you would invest 1,765 in Prudential Jennison Financial on September 12, 2024 and sell it today you would earn a total of 888.00 from holding Prudential Jennison Financial or generate 50.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Pear Tree Polaris
Performance |
| Timeline |
| Prudential Jennison |
| Pear Tree Polaris |
Prudential Jennison and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Pear Tree
The main advantage of trading using opposite Prudential Jennison and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Prudential Jennison vs. City National Rochdale | Prudential Jennison vs. Payden High Income | Prudential Jennison vs. Jpmorgan High Yield | Prudential Jennison vs. Blackrock High Yield |
| Pear Tree vs. Oakmark International Fund | Pear Tree vs. Oakmark Global Fund | Pear Tree vs. Oakmark Select Fund | Pear Tree vs. Oakmark Global Select |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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