Correlation Between Prudential Jennison and Eagle Capital
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Eagle Capital 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 Eagle Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Equity and Eagle Capital Appreciation, you can compare the effects of market volatilities on Prudential Jennison and Eagle Capital 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 Eagle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Eagle Capital.
Diversification Opportunities for Prudential Jennison and Eagle Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Eagle is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Equity and Eagle Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Apprec 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 Equity are associated (or correlated) with Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Apprec has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Eagle Capital go up and down completely randomly.
Pair Corralation between Prudential Jennison and Eagle Capital
Assuming the 90 days horizon Prudential Jennison Equity is expected to under-perform the Eagle Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Jennison Equity is 2.1 times less risky than Eagle Capital. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Eagle Capital Appreciation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,798 in Eagle Capital Appreciation on August 24, 2024 and sell it today you would earn a total of 265.00 from holding Eagle Capital Appreciation or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Equity vs. Eagle Capital Appreciation
Performance |
| Timeline |
| Prudential Jennison |
| Eagle Capital Apprec |
Prudential Jennison and Eagle Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Eagle Capital
The main advantage of trading using opposite Prudential Jennison and Eagle Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Eagle Capital 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 Eagle Capital will offset losses from the drop in Eagle Capital's long position.| Prudential Jennison vs. Pace High Yield | Prudential Jennison vs. Alliancebernstein Global High | Prudential Jennison vs. Goldman Sachs High | Prudential Jennison vs. Western Asset High |
| Eagle Capital vs. HUMANA INC | Eagle Capital vs. Aquagold International | Eagle Capital vs. Barloworld Ltd ADR | Eagle Capital vs. Morningstar Unconstrained Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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