Correlation Between Prudential Health and Bitcoin Strategy

Can any of the company-specific risk be diversified away by investing in both Prudential Health and Bitcoin Strategy 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 Health and Bitcoin Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prudential Health Sciences and Bitcoin Strategy Profund, you can compare the effects of market volatilities on Prudential Health and Bitcoin Strategy 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 Health with a short position of Bitcoin Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and Bitcoin Strategy.

Diversification Opportunities for Prudential Health and Bitcoin Strategy

-0.47

Correlation Coefficient

Prudential Health  Bitcoin Strategy

Very good diversification

The 3 months correlation between Prudential and Bitcoin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and Bitcoin Strategy Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Strategy Profund and Prudential Health 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 Health Sciences are associated (or correlated) with Bitcoin Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Strategy Profund has no effect on the direction of Prudential Health i.e., Prudential Health and Bitcoin Strategy go up and down completely randomly.

Pair Corralation between Prudential Health and Bitcoin Strategy

Assuming the 90 days horizon Prudential Health Sciences is expected to under-perform the Bitcoin Strategy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Health Sciences is 1.11 times less risky than Bitcoin Strategy. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Bitcoin Strategy Profund is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,299  in Bitcoin Strategy Profund on September 29, 2024 and sell it today you would lose (150.00) from holding Bitcoin Strategy Profund or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Prudential Health Sciences  vs.  Bitcoin Strategy Profund

Prudential Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Bitcoin Strategy Profund

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Strategy Profund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Bitcoin Strategy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prudential Health and Bitcoin Strategy

The main advantage of trading using opposite Prudential Health and Bitcoin Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health position performs unexpectedly, Bitcoin Strategy 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 Bitcoin Strategy will offset losses from the drop in Bitcoin Strategy's long position.

The idea behind Prudential Health Sciences and Bitcoin Strategy Profund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.