Correlation Between Prudential Real and Franklin
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Franklin 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 Real and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Real Estate and Franklin Government Money, you can compare the effects of market volatilities on Prudential Real and Franklin 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 Real with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Franklin.
Diversification Opportunities for Prudential Real and Franklin
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Franklin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Prudential Real 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 Real Estate are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Prudential Real i.e., Prudential Real and Franklin go up and down completely randomly.
Pair Corralation between Prudential Real and Franklin
If you would invest 1,522 in Prudential Real Estate on November 3, 2024 and sell it today you would earn a total of 28.00 from holding Prudential Real Estate or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Prudential Real Estate vs. Franklin Government Money
Performance |
| Timeline |
| Prudential Real Estate |
| Franklin Government Money |
Prudential Real and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Franklin
The main advantage of trading using opposite Prudential Real and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Franklin 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 Franklin will offset losses from the drop in Franklin's long position.| Prudential Real vs. Abbey Capital Futures | Prudential Real vs. Ab Bond Inflation | Prudential Real vs. Guggenheim Managed Futures | Prudential Real vs. Ab Bond Inflation |
| Franklin vs. Gmo High Yield | Franklin vs. Pace High Yield | Franklin vs. Massmutual Premier High | Franklin vs. The Hartford High |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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