Correlation Between Prudential Jennison and Siit Dynamic

Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Siit Dynamic 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 Siit Dynamic 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 Siit Dynamic Asset, you can compare the effects of market volatilities on Prudential Jennison and Siit Dynamic 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 Siit Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Siit Dynamic.

Diversification Opportunities for Prudential Jennison and Siit Dynamic

0.97

Correlation Coefficient

Prudential Jennison  Siit Dynamic

Almost no diversification

The 3 months correlation between Prudential and Siit is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Equity and Siit Dynamic Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Dynamic Asset 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 Siit Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Dynamic Asset has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Siit Dynamic go up and down completely randomly.

Pair Corralation between Prudential Jennison and Siit Dynamic

Assuming the 90 days horizon Prudential Jennison Equity is expected to generate 0.87 times more return on investment than Siit Dynamic. However, Prudential Jennison Equity is 1.15 times less risky than Siit Dynamic. It trades about 0.1 of its potential returns per unit of risk. Siit Dynamic Asset is currently generating about 0.07 per unit of risk. If you would invest  1,821  in Prudential Jennison Equity on September 4, 2024 and sell it today you would earn a total of  452.00  from holding Prudential Jennison Equity or generate 24.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Prudential Jennison Equity  vs.  Siit Dynamic Asset

Prudential Jennison

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Jennison Equity are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Jennison may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siit Dynamic Asset

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Dynamic Asset are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Dynamic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Prudential Jennison and Siit Dynamic

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

The idea behind Prudential Jennison Equity and Siit Dynamic Asset 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.