Correlation Between Prudential Public and Citizens
Can any of the company-specific risk be diversified away by investing in both Prudential Public and Citizens 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 Public and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Public Limited and Citizens, you can compare the effects of market volatilities on Prudential Public and Citizens 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 Public with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Public and Citizens.
Diversification Opportunities for Prudential Public and Citizens
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Citizens is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Public Limited and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Prudential Public 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 Public Limited are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Prudential Public i.e., Prudential Public and Citizens go up and down completely randomly.
Pair Corralation between Prudential Public and Citizens
Considering the 90-day investment horizon Prudential Public Limited is expected to under-perform the Citizens. But the stock apears to be less risky and, when comparing its historical volatility, Prudential Public Limited is 1.93 times less risky than Citizens. The stock trades about -0.06 of its potential returns per unit of risk. The Citizens is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 214.00 in Citizens on August 31, 2024 and sell it today you would earn a total of 234.00 from holding Citizens or generate 109.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Public Limited vs. Citizens
Performance |
| Timeline |
| Prudential Public |
| Citizens |
Prudential Public and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Public and Citizens
The main advantage of trading using opposite Prudential Public and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Public position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Prudential Public vs. CNO Financial Group | Prudential Public vs. Jackson Financial | Prudential Public vs. MetLife Preferred Stock | Prudential Public vs. Jackson Financial |
| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |