Correlation Between Siit High and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Siit High and Prudential Jennison 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 Siit High and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Prudential Jennison Equity, you can compare the effects of market volatilities on Siit High and Prudential Jennison 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 Siit High with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Prudential Jennison.
Diversification Opportunities for Siit High and Prudential Jennison
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Prudential is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Prudential Jennison Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Siit High 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 Siit High Yield are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Siit High i.e., Siit High and Prudential Jennison go up and down completely randomly.
Pair Corralation between Siit High and Prudential Jennison
Assuming the 90 days horizon Siit High Yield is expected to generate 0.15 times more return on investment than Prudential Jennison. However, Siit High Yield is 6.62 times less risky than Prudential Jennison. It trades about -0.43 of its potential returns per unit of risk. Prudential Jennison Equity is currently generating about -0.13 per unit of risk. If you would invest 709.00 in Siit High Yield on January 13, 2025 and sell it today you would lose (25.00) from holding Siit High Yield or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Prudential Jennison Equity
Performance |
| Timeline |
| Siit High Yield |
| Prudential Jennison |
Siit High and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Prudential Jennison
The main advantage of trading using opposite Siit High and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Siit High vs. Gold And Precious | Siit High vs. The Gold Bullion | Siit High vs. Gamco Global Gold | Siit High vs. James Balanced Golden |
| Prudential Jennison vs. Absolute Convertible Arbitrage | Prudential Jennison vs. Gabelli Convertible And | Prudential Jennison vs. Calamos Dynamic Convertible | Prudential Jennison vs. Lord Abbett Convertible |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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