Correlation Between Prudential Health and Aig Government
Can any of the company-specific risk be diversified away by investing in both Prudential Health and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Prudential Health and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and Aig Government.
Diversification Opportunities for Prudential Health and Aig Government
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Aig is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Prudential Health i.e., Prudential Health and Aig Government go up and down completely randomly.
Pair Corralation between Prudential Health and Aig Government
Assuming the 90 days horizon Prudential Health Sciences is expected to generate 4.85 times more return on investment than Aig Government. However, Prudential Health is 4.85 times more volatile than Aig Government Money. It trades about 0.07 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.15 per unit of risk. If you would invest 4,087 in Prudential Health Sciences on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Prudential Health Sciences or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Health Sciences vs. Aig Government Money
Performance |
| Timeline |
| Prudential Health |
| Aig Government Money |
Prudential Health and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Health and Aig Government
The main advantage of trading using opposite Prudential Health and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Prudential Health vs. Volumetric Fund Volumetric | Prudential Health vs. Auer Growth Fund | Prudential Health vs. Small Cap Stock | Prudential Health vs. Issachar Fund Class |
| Aig Government vs. Prudential Health Sciences | Aig Government vs. Health Biotchnology Portfolio | Aig Government vs. Baillie Gifford Health | Aig Government vs. Baron Health Care |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |