Correlation Between Inflation Adjusted and Prudential California
Can any of the company-specific risk be diversified away by investing in both Inflation Adjusted and Prudential California 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 Inflation Adjusted and Prudential California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Adjusted Bond Fund and Prudential California Muni, you can compare the effects of market volatilities on Inflation Adjusted and Prudential California 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 Inflation Adjusted with a short position of Prudential California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Adjusted and Prudential California.
Diversification Opportunities for Inflation Adjusted and Prudential California
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inflation and Prudential is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Adjusted Bond Fund and Prudential California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential California and Inflation Adjusted 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 Inflation Adjusted Bond Fund are associated (or correlated) with Prudential California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential California has no effect on the direction of Inflation Adjusted i.e., Inflation Adjusted and Prudential California go up and down completely randomly.
Pair Corralation between Inflation Adjusted and Prudential California
Assuming the 90 days horizon Inflation Adjusted Bond Fund is expected to generate 2.49 times more return on investment than Prudential California. However, Inflation Adjusted is 2.49 times more volatile than Prudential California Muni. It trades about 0.18 of its potential returns per unit of risk. Prudential California Muni is currently generating about 0.25 per unit of risk. If you would invest 1,043 in Inflation Adjusted Bond Fund on May 26, 2025 and sell it today you would earn a total of 29.00 from holding Inflation Adjusted Bond Fund or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Adjusted Bond Fund vs. Prudential California Muni
Performance |
| Timeline |
| Inflation Adjusted Bond |
| Prudential California |
Inflation Adjusted and Prudential California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation Adjusted and Prudential California
The main advantage of trading using opposite Inflation Adjusted and Prudential California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation Adjusted position performs unexpectedly, Prudential California 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 California will offset losses from the drop in Prudential California's long position.| Inflation Adjusted vs. Asg Managed Futures | Inflation Adjusted vs. Lincoln Inflation Plus | Inflation Adjusted vs. Nationwide Inflation Protected Securities | Inflation Adjusted vs. Pimco Inflation Response |
| Prudential California vs. Ultrasmall Cap Profund Ultrasmall Cap | Prudential California vs. Goldman Sachs Small | Prudential California vs. Small Cap Value Fund | Prudential California vs. Lord Abbett Small |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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