Correlation Between Prudential Health and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Prudential Health and Mainstay High 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 Health and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Health Sciences and Mainstay High Yield, you can compare the effects of market volatilities on Prudential Health and Mainstay High 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 Health with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and Mainstay High.
Diversification Opportunities for Prudential Health and Mainstay High
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Mainstay is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Prudential Health 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 Health Sciences are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Prudential Health i.e., Prudential Health and Mainstay High go up and down completely randomly.
Pair Corralation between Prudential Health and Mainstay High
Assuming the 90 days horizon Prudential Health Sciences is expected to generate 3.65 times more return on investment than Mainstay High. However, Prudential Health is 3.65 times more volatile than Mainstay High Yield. It trades about 0.06 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.15 per unit of risk. If you would invest 3,217 in Prudential Health Sciences on September 12, 2024 and sell it today you would earn a total of 906.00 from holding Prudential Health Sciences or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Health Sciences vs. Mainstay High Yield
Performance |
| Timeline |
| Prudential Health |
| Mainstay High Yield |
Prudential Health and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Health and Mainstay High
The main advantage of trading using opposite Prudential Health and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health position performs unexpectedly, Mainstay High 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 Mainstay High will offset losses from the drop in Mainstay High's long position.| Prudential Health vs. Sp Midcap Index | Prudential Health vs. Extended Market Index | Prudential Health vs. Ab All Market | Prudential Health vs. Aqr Long Short Equity |
| Mainstay High vs. Live Oak Health | Mainstay High vs. Health Biotchnology Portfolio | Mainstay High vs. Baillie Gifford Health | Mainstay High vs. Prudential Health Sciences |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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