Correlation Between Prudential Jennison and Wellington Shields
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Wellington Shields 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 Wellington Shields 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 Wellington Shields All Cap, you can compare the effects of market volatilities on Prudential Jennison and Wellington Shields 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 Wellington Shields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Wellington Shields.
Diversification Opportunities for Prudential Jennison and Wellington Shields
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Wellington is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Internatio and Wellington Shields All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wellington Shields All 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 Wellington Shields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wellington Shields All has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Wellington Shields go up and down completely randomly.
Pair Corralation between Prudential Jennison and Wellington Shields
Assuming the 90 days horizon Prudential Jennison International is expected to generate 0.59 times more return on investment than Wellington Shields. However, Prudential Jennison International is 1.7 times less risky than Wellington Shields. It trades about -0.24 of its potential returns per unit of risk. Wellington Shields All Cap is currently generating about -0.16 per unit of risk. If you would invest 3,187 in Prudential Jennison International on October 9, 2024 and sell it today you would lose (125.00) from holding Prudential Jennison International or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Internatio vs. Wellington Shields All Cap
Performance |
| Timeline |
| Prudential Jennison |
| Wellington Shields All |
Prudential Jennison and Wellington Shields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Wellington Shields
The main advantage of trading using opposite Prudential Jennison and Wellington Shields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Wellington Shields 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 Wellington Shields will offset losses from the drop in Wellington Shields' long position.| Prudential Jennison vs. Rbc Global Equity | Prudential Jennison vs. Morgan Stanley Global | Prudential Jennison vs. Aqr Global Macro | Prudential Jennison vs. Wisdomtree Siegel Global |
| Wellington Shields vs. Fidelity Otc Portfolio | Wellington Shields vs. Alger Smidcap Focus | Wellington Shields vs. Jpmorgan Strategic Income | Wellington Shields vs. Cleartrack 2020 Class |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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