Correlation Between Prudential Jennison and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Akre Focus 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 Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Small and Akre Focus Fund, you can compare the effects of market volatilities on Prudential Jennison and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Akre Focus.
Diversification Opportunities for Prudential Jennison and Akre Focus
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prudential and Akre is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Small and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Small are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Akre Focus go up and down completely randomly.
Pair Corralation between Prudential Jennison and Akre Focus
Assuming the 90 days horizon Prudential Jennison Small is expected to generate 1.26 times more return on investment than Akre Focus. However, Prudential Jennison is 1.26 times more volatile than Akre Focus Fund. It trades about 0.11 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.13 per unit of risk. If you would invest 1,773 in Prudential Jennison Small on September 4, 2024 and sell it today you would earn a total of 514.00 from holding Prudential Jennison Small or generate 28.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Prudential Jennison Small vs. Akre Focus Fund
Performance |
| Timeline |
| Prudential Jennison Small |
| Akre Focus Fund |
Prudential Jennison and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Akre Focus
The main advantage of trading using opposite Prudential Jennison and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Prudential Jennison vs. Leggmason Partners Institutional | Prudential Jennison vs. Volumetric Fund Volumetric | Prudential Jennison vs. Rbc Microcap Value | Prudential Jennison vs. Fa 529 Aggressive |
| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey Growth | Akre Focus vs. Vanguard Dividend Growth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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