Correlation Between Prudential Jennison and Prudential
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Prudential 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 Prudential 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 Prudential E Bond, you can compare the effects of market volatilities on Prudential Jennison and Prudential 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 Prudential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Prudential.
Diversification Opportunities for Prudential Jennison and Prudential
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Prudential is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Internatio and Prudential E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential E Bond 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 Prudential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential E Bond has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Prudential go up and down completely randomly.
Pair Corralation between Prudential Jennison and Prudential
Assuming the 90 days horizon Prudential Jennison International is expected to generate 2.47 times more return on investment than Prudential. However, Prudential Jennison is 2.47 times more volatile than Prudential E Bond. It trades about 0.06 of its potential returns per unit of risk. Prudential E Bond is currently generating about 0.05 per unit of risk. If you would invest 3,160 in Prudential Jennison International on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Prudential Jennison International or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prudential Jennison Internatio vs. Prudential E Bond
Performance |
| Timeline |
| Prudential Jennison |
| Prudential E Bond |
Prudential Jennison and Prudential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Prudential
The main advantage of trading using opposite Prudential Jennison and Prudential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Prudential 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 Prudential will offset losses from the drop in Prudential'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 |
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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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