Correlation Between Prudential Core and Gabelli Value
Can any of the company-specific risk be diversified away by investing in both Prudential Core and Gabelli Value 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 Core and Gabelli Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Core Conservative and The Gabelli Value, you can compare the effects of market volatilities on Prudential Core and Gabelli Value 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 Core with a short position of Gabelli Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Core and Gabelli Value.
Diversification Opportunities for Prudential Core and Gabelli Value
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Gabelli is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Core Conservative and The Gabelli Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Value and Prudential Core 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 Core Conservative are associated (or correlated) with Gabelli Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Value has no effect on the direction of Prudential Core i.e., Prudential Core and Gabelli Value go up and down completely randomly.
Pair Corralation between Prudential Core and Gabelli Value
Assuming the 90 days horizon Prudential Core is expected to generate 3.38 times less return on investment than Gabelli Value. But when comparing it to its historical volatility, Prudential Core Conservative is 1.61 times less risky than Gabelli Value. It trades about 0.11 of its potential returns per unit of risk. The Gabelli Value is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,093 in The Gabelli Value on September 9, 2024 and sell it today you would earn a total of 26.00 from holding The Gabelli Value or generate 2.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Prudential Core Conservative vs. The Gabelli Value
Performance |
Timeline |
Prudential Core Cons |
Gabelli Value |
Prudential Core and Gabelli Value Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prudential Core and Gabelli Value
The main advantage of trading using opposite Prudential Core and Gabelli Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Core position performs unexpectedly, Gabelli Value 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 Gabelli Value will offset losses from the drop in Gabelli Value's long position.Prudential Core vs. Baird Strategic Municipal | Prudential Core vs. Ab Impact Municipal | Prudential Core vs. Old Westbury Municipal | Prudential Core vs. The Hartford Municipal |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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