Correlation Between Prudential Jennison and Matthews Pacific
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Matthews Pacific 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 Matthews Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Mid Cap and Matthews Pacific Tiger, you can compare the effects of market volatilities on Prudential Jennison and Matthews Pacific 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 Matthews Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Matthews Pacific.
Diversification Opportunities for Prudential Jennison and Matthews Pacific
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prudential and Matthews is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Mid Cap and Matthews Pacific Tiger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Pacific Tiger 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 Mid Cap are associated (or correlated) with Matthews Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Pacific Tiger has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Matthews Pacific go up and down completely randomly.
Pair Corralation between Prudential Jennison and Matthews Pacific
Assuming the 90 days horizon Prudential Jennison Mid Cap is expected to generate 0.97 times more return on investment than Matthews Pacific. However, Prudential Jennison Mid Cap is 1.03 times less risky than Matthews Pacific. It trades about 0.06 of its potential returns per unit of risk. Matthews Pacific Tiger is currently generating about -0.01 per unit of risk. If you would invest 1,898 in Prudential Jennison Mid Cap on September 3, 2024 and sell it today you would earn a total of 647.00 from holding Prudential Jennison Mid Cap or generate 34.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Mid Cap vs. Matthews Pacific Tiger
Performance |
| Timeline |
| Prudential Jennison Mid |
| Matthews Pacific Tiger |
Prudential Jennison and Matthews Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Matthews Pacific
The main advantage of trading using opposite Prudential Jennison and Matthews Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Matthews Pacific 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 Matthews Pacific will offset losses from the drop in Matthews Pacific's long position.| Prudential Jennison vs. T Rowe Price | Prudential Jennison vs. Versatile Bond Portfolio | Prudential Jennison vs. Ms Global Fixed | Prudential Jennison vs. Ambrus Core Bond |
| Matthews Pacific vs. Matthews Asia Dividend | Matthews Pacific vs. Wcm Focused International | Matthews Pacific vs. Invesco Disciplined Equity | Matthews Pacific vs. Matthews Asian 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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