Correlation Between Dana Large and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Dana Large and Prudential Jennison 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 Dana Large and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Prudential Jennison Small, you can compare the effects of market volatilities on Dana Large and Prudential Jennison 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 Dana Large with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Prudential Jennison.
Diversification Opportunities for Dana Large and Prudential Jennison
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dana and Prudential is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Prudential Jennison Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Small and Dana Large 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 Dana Large Cap are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison Small has no effect on the direction of Dana Large i.e., Dana Large and Prudential Jennison go up and down completely randomly.
Pair Corralation between Dana Large and Prudential Jennison
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.73 times more return on investment than Prudential Jennison. However, Dana Large Cap is 1.38 times less risky than Prudential Jennison. It trades about 0.22 of its potential returns per unit of risk. Prudential Jennison Small is currently generating about 0.13 per unit of risk. If you would invest 2,206 in Dana Large Cap on June 7, 2025 and sell it today you would earn a total of 197.00 from holding Dana Large Cap or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Prudential Jennison Small
Performance |
| Timeline |
| Dana Large Cap |
| Prudential Jennison Small |
Dana Large and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Prudential Jennison
The main advantage of trading using opposite Dana Large and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Dana Large vs. Dana Epiphany Esg | Dana Large vs. Dana Small Cap | Dana Large vs. Cornerstone Moderately Aggressive | Dana Large vs. Eaton Vance Tax |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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