Correlation Between Prudential Intl and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Prudential Intl and Prudential Emerging 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 Intl and Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Intl Bond and Prudential Emerging Markets, you can compare the effects of market volatilities on Prudential Intl and Prudential Emerging 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 Intl with a short position of Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Intl and Prudential Emerging.
Diversification Opportunities for Prudential Intl and Prudential Emerging
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Prudential is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Intl Bond and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging and Prudential Intl 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 Intl Bond are associated (or correlated) with Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Prudential Intl i.e., Prudential Intl and Prudential Emerging go up and down completely randomly.
Pair Corralation between Prudential Intl and Prudential Emerging
If you would invest 451.00 in Prudential Emerging Markets on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Prudential Emerging Markets or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Prudential Intl Bond vs. Prudential Emerging Markets
Performance |
| Timeline |
| Prudential Intl Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Prudential Emerging |
Prudential Intl and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Intl and Prudential Emerging
The main advantage of trading using opposite Prudential Intl and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Intl position performs unexpectedly, Prudential Emerging 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 Emerging will offset losses from the drop in Prudential Emerging's long position.| Prudential Intl vs. Prudential Select Real | Prudential Intl vs. Prudential Short Duration | Prudential Intl vs. Prudential Unconstrained Bond |
| Prudential Emerging vs. Franklin Gold Precious | Prudential Emerging vs. Gamco Global Gold | Prudential Emerging vs. Goldman Sachs Clean | Prudential Emerging vs. Gabelli Gold Fund |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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