Correlation Between Prudential Real and Thornburg
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Thornburg 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 Thornburg 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 Thornburg E Growth, you can compare the effects of market volatilities on Prudential Real and Thornburg 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 Thornburg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Thornburg.
Diversification Opportunities for Prudential Real and Thornburg
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Thornburg is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E 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 Thornburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Prudential Real i.e., Prudential Real and Thornburg go up and down completely randomly.
Pair Corralation between Prudential Real and Thornburg
Assuming the 90 days horizon Prudential Real Estate is expected to under-perform the Thornburg. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Real Estate is 2.37 times less risky than Thornburg. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Thornburg E Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,125 in Thornburg E Growth on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Thornburg E Growth or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential Real Estate vs. Thornburg E Growth
Performance |
| Timeline |
| Prudential Real Estate |
| Thornburg E Growth |
Prudential Real and Thornburg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Thornburg
The main advantage of trading using opposite Prudential Real and Thornburg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Thornburg 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 Thornburg will offset losses from the drop in Thornburg's long position.| Prudential Real vs. Artisan Emerging Markets | Prudential Real vs. Investec Emerging Markets | Prudential Real vs. Mid Cap 15x Strategy | Prudential Real vs. Vy Jpmorgan Emerging |
| Thornburg vs. Thornburg Value Fund | Thornburg vs. Thornburg Value Fund | Thornburg vs. Thornburg International Value | Thornburg vs. Thornburg International Value |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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