Correlation Between Crossmark Steward and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Crossmark Steward 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 Crossmark Steward and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crossmark Steward Equity and Prudential Jennison Small, you can compare the effects of market volatilities on Crossmark Steward 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 Crossmark Steward with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossmark Steward and Prudential Jennison.
Diversification Opportunities for Crossmark Steward and Prudential Jennison
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crossmark and Prudential is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Crossmark Steward Equity and Prudential Jennison Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Small and Crossmark Steward 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 Crossmark Steward Equity 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 Small has no effect on the direction of Crossmark Steward i.e., Crossmark Steward and Prudential Jennison go up and down completely randomly.
Pair Corralation between Crossmark Steward and Prudential Jennison
Assuming the 90 days horizon Crossmark Steward Equity is expected to under-perform the Prudential Jennison. But the mutual fund apears to be less risky and, when comparing its historical volatility, Crossmark Steward Equity is 2.14 times less risky than Prudential Jennison. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Prudential Jennison Small is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,467 in Prudential Jennison Small on August 28, 2024 and sell it today you would earn a total of 192.00 from holding Prudential Jennison Small or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossmark Steward Equity vs. Prudential Jennison Small
Performance |
| Timeline |
| Crossmark Steward Equity |
| Prudential Jennison Small |
Crossmark Steward and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossmark Steward and Prudential Jennison
The main advantage of trading using opposite Crossmark Steward and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossmark Steward 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.| Crossmark Steward vs. Steward Small Mid Cap | Crossmark Steward vs. Steward Small Mid Cap | Crossmark Steward vs. Steward Ered Call | Crossmark Steward vs. Steward Ered Call |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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