Correlation Between Prudential Real and Ladenburg Growth
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Ladenburg Growth 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 Ladenburg Growth 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 Ladenburg Growth, you can compare the effects of market volatilities on Prudential Real and Ladenburg Growth 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 Ladenburg Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Ladenburg Growth.
Diversification Opportunities for Prudential Real and Ladenburg Growth
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prudential and Ladenburg is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth 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 Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Prudential Real i.e., Prudential Real and Ladenburg Growth go up and down completely randomly.
Pair Corralation between Prudential Real and Ladenburg Growth
Assuming the 90 days horizon Prudential Real Estate is expected to generate 1.03 times more return on investment than Ladenburg Growth. However, Prudential Real is 1.03 times more volatile than Ladenburg Growth. It trades about 0.24 of its potential returns per unit of risk. Ladenburg Growth is currently generating about 0.15 per unit of risk. If you would invest 663.00 in Prudential Real Estate on September 2, 2024 and sell it today you would earn a total of 155.00 from holding Prudential Real Estate or generate 23.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Real Estate vs. Ladenburg Growth
Performance |
| Timeline |
| Prudential Real Estate |
| Ladenburg Growth |
Prudential Real and Ladenburg Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Ladenburg Growth
The main advantage of trading using opposite Prudential Real and Ladenburg Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Ladenburg Growth 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 Ladenburg Growth will offset losses from the drop in Ladenburg Growth's long position.| Prudential Real vs. Absolute Convertible Arbitrage | Prudential Real vs. Advent Claymore Convertible | Prudential Real vs. Harbor Vertible Securities | Prudential Real vs. Fidelity Sai Convertible |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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