Correlation Between Prudential Jennison and Dana Small
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Dana Small 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 Dana Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison International and Dana Small Cap, you can compare the effects of market volatilities on Prudential Jennison and Dana Small 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 Dana Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Dana Small.
Diversification Opportunities for Prudential Jennison and Dana Small
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Dana is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Internatio and Dana Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Small Cap 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 International are associated (or correlated) with Dana Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Small Cap has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Dana Small go up and down completely randomly.
Pair Corralation between Prudential Jennison and Dana Small
Assuming the 90 days horizon Prudential Jennison is expected to generate 1.06 times less return on investment than Dana Small. But when comparing it to its historical volatility, Prudential Jennison International is 1.21 times less risky than Dana Small. It trades about 0.06 of its potential returns per unit of risk. Dana Small Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,142 in Dana Small Cap on September 12, 2024 and sell it today you would earn a total of 410.00 from holding Dana Small Cap or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Internatio vs. Dana Small Cap
Performance |
| Timeline |
| Prudential Jennison |
| Dana Small Cap |
Prudential Jennison and Dana Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Dana Small
The main advantage of trading using opposite Prudential Jennison and Dana Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Dana Small 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 Dana Small will offset losses from the drop in Dana Small's long position.| Prudential Jennison vs. Shelton Emerging Markets | Prudential Jennison vs. Investec Emerging Markets | Prudential Jennison vs. Black Oak Emerging | Prudential Jennison vs. Artisan Emerging Markets |
| Dana Small vs. Hennessy Technology Fund | Dana Small vs. Janus Global Technology | Dana Small vs. Firsthand Technology Opportunities | Dana Small vs. Red Oak Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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