Correlation Between Prudential Real and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Aberdeen China 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 Aberdeen China 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 Aberdeen China Oppty, you can compare the effects of market volatilities on Prudential Real and Aberdeen China 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 Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Aberdeen China.
Diversification Opportunities for Prudential Real and Aberdeen China
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prudential and Aberdeen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Prudential Real i.e., Prudential Real and Aberdeen China go up and down completely randomly.
Pair Corralation between Prudential Real and Aberdeen China
Assuming the 90 days horizon Prudential Real Estate is expected to generate 0.61 times more return on investment than Aberdeen China. However, Prudential Real Estate is 1.65 times less risky than Aberdeen China. It trades about 0.08 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about 0.0 per unit of risk. If you would invest 634.00 in Prudential Real Estate on September 12, 2024 and sell it today you would earn a total of 169.00 from holding Prudential Real Estate or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Prudential Real Estate vs. Aberdeen China Oppty
Performance |
| Timeline |
| Prudential Real Estate |
| Aberdeen China Oppty |
Prudential Real and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Aberdeen China
The main advantage of trading using opposite Prudential Real and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Prudential Real vs. Dws Government Money | Prudential Real vs. California High Yield Municipal | Prudential Real vs. Baird Strategic Municipal | Prudential Real vs. Nuveen Minnesota Municipal |
| Aberdeen China vs. Prudential Real Estate | Aberdeen China vs. Short Real Estate | Aberdeen China vs. Goldman Sachs Real | Aberdeen China vs. Vy Clarion Real |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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